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MANILA, Philippines — Sorsogon governor and senatorial aspirant Francis “Chiz” Escudero on Friday called on the Bangko Sentral ng Pilipinas (BSP) to put up policies that will address the “weakness” in digital banking systems as he raised concerns over what he said are increasing incidents of online fraud affecting Philippine banks.
In a statement, Escudero, who used to chair the Senate Committee on Banks, Financial Institutions, and Currencies, said the breach of security in banks is a serious issue that needs the intervention of the BSP.
“As institutions imbued with public trust, banks have the responsibility to protect their clients’ data and resources. But the breach of banks’ security systems, which we have repeatedly seen for several years now, shows that the digital infrastructure needed to do that is grossly lacking,” Escudero said.
“The BSP needs to put in place policies that will address this weakness in banking systems if it wants to promote financial inclusion through digital banking and digital payments. How can you expect people to try online banking and digital payments when they are not confident of the banks’ ability to protect them?” he added.
He said the BSP should go beyond the occasional fraud investigation and establish policies that will ensure all commercial, rural, thrift, and digital banks have the infrastructure to protect their clients.
Close to 700 clients of local banking giant BDO Unibank were recently affected by a “sophisticated” one-time-pin (OTP) fraud and suffered unauthorized transactions. Their reimbursements are now being processed.
The BSP, for its part, has already formed a task force to investigate the matter.
Escudero also noted past incidents where Philippine banks fell victim to a “sophisticated cyberattack” or suffered technical glitches that affected their clients’ accounts.
“The way we do banking has evolved, and the challenges have evolved as well. The BSP can and must look at long-term interventions, including incentives and penalties, that will push banks to strengthen their security and information systems. This should be a priority as we transition to digital platforms,” Escudero went on.
The BSP, the former senator said, is mandated by law to establish standards for operations of banks according to what it deems to be sound practices and necessary interventions.
“Now would be a good time for the BSP to examine how to make banking work in a digitally-driven era that comes with as many risks as there are benefits,” he added.