The Monetary Authority of Singapore (MAS) has imposed an additional capital requirement, of approximately SGD 330 million ($240 million), on OCBC Bank (OCBC), given the deficiencies in the bank’s response to a wave of spoofed SMS phishing scams in December 2021.
OCBC is required to apply a multiplier of 1.3 times to its risk-weighted assets for operational risk. This translates to an additional amount of approximately SGD 330 million ($240 million) in regulatory capital based on reported financial statements as of 31 March 2022.
Following the scams, OCBC engaged an independent firm to review its systems and processes. Deficiencies were noted in the bank’s mitigation of identified risks, pre- and post-transaction controls, incident management and complaints handling, resulting in delays in containment measures and customer response time. The deficiencies identified are in line with MAS’ assessment and the bank is in the process of addressing them.
The additional capital requirement imposed takes into consideration actions taken by OCBC to strengthen its controls and its approach to resolving customer complaints following the incident. The additional capital requirement will be reviewed when MAS is satisfied that OCBC has addressed all deficiencies identified in the review.
Marcus Lim, assistant managing director, banking and insurance at MAS said, “Financial institutions have a duty to put in place robust measures to prevent, detect and respond to scams. This means ensuring that their controls remain effective against evolving scam tactics, and prompt actions are taken as soon as a scam is detected. Consumers must also remain vigilant against persistent attempts by scammers to deceive them into divulging their log-in credentials or initiating transfers themselves. MAS is working closely with the industry and other agencies to further strengthen our collective defences against scams”.
Re-disseminated by The Asian Banker