Independent consultant recommends OCBC to use more data for surveillance to fight scams

SINGAPORE: An independent consultant has recommended OCBC Bank to tap more on data and take “a more integrated approach” to fight frauds and scams, following a review of the bank’s processes.

OCBC engaged PricewaterhouseCoopers Risk Services to do a “special review” of its fraud surveillance systems and management processes after nearly 800 of its customers fell prey to SMS phishing scams involving the bank last year. The independent review, which also covered recommendations for improvements, has been completed.

“These recommendations include a further use of data for surveillance and taking a more integrated approach in our fight against frauds and scams,” said group chief executive officer Helen Wong at the bank’s annual shareholder meeting held virtually on Friday (Apr 22).

Total losses from the scam amounted to S$13.7 million. OCBC has made “full goodwill payouts” to all victims – a move that the second-largest bank in Singapore described as a “one-off gesture” given the circumstances of the scam.

Ms Wong said the phishing scam was “unprecedented” and displayed “a realism not seen in previous scams”, but there was no evidence of any compromise in the bank’s systems.

Still, the bank has taken several steps to address customer confidence. These include strengthening its existing fraud surveillance, prevention and controls, setting up a dedicated customer service hotline and care team for fraud victims, as well as ramping up customer communication about scam prevention.

OCBC also rolled out a “kill switch” in February that would allow customers to freeze their bank accounts during emergencies.

“We have and will continue to work with all parties in the ecosystem … so as to provide a safe and seamless interaction with our customers,” Ms Wong said.

In a separate bourse filing on Wednesday to address “substantial and relevant questions” submitted by shareholders ahead of the annual general meeting, OCBC said it “did not experience a rise in outflow of customers’ funds” following the SMS phishing attack.

“Our reviews indicated that customer funds outflow during that period was consistent with the trends in prior years,” it added.

In her presentation, Ms Wong also said OCBC’s exposure to Ukraine and Russia is “minimal”, given how the bank’s businesses are predominantly in Asia and international branches serve mainly network customers.

But OCBC is taking the crisis “seriously” and continues to monitor if other segments of its portfolio will be affected, she added.

During the live question and answer segment, a shareholder asked for reasons behind the 10 per cent rise in staff costs last year, despite average group headcount inching up by only 0.27 per cent to 30,610 according to its annual report.

Ms Wong replied that some of the rise in staff costs can be attributed to annual wage increments, as it plays its part of being a responsible employer and investing in upskilling its workers.

Group chief financial officer Darren Tan added that the bank has ramped up hiring in wealth management and IT, where wages have gone up given market competition for talent.

OCBC had announced last month that it plans to hire 1,500 technology talents over the next three years to accelerate digital transformation and growth.

Another reason is the reduction in wage subsidies from the Government, Mr Tan said.

“So the change in terms of the Job Support Scheme credit would have also accounted for the relative increase in terms of salary costs, even though the headcount has not increased as dramatically."