KSA banks set high security standards

Talat Hafiz, secretary general of Media & Banking Awareness Committee of Saudi Banks.

Talat Hafiz, secretary general of Media & Banking Awareness Committee of Saudi Banks.

Saudi banks are committed to applying the highest international standards and best practices to protect their systems, says an industry leader.

Tough measures against financial fraud, money-laundering and the funding of terrorism have placed the Kingdom’s banking sector among the most advanced financial institutions worldwide, says Talat Hafiz, secretary general of Media & Banking Awareness Committee of Saudi Banks.

“Their measures have further improved their ability to combat the operations of money-laundering and funding of terrorism, including different forms and types of financial fraud,” Hafiz told Arab News in an exclusive interview.

“Saudi banks are on par with foreign banks in tackling and dealing with the menace of fraud by continuing to protect their internal systems and also by continuing to make their clients aware of any new financial fraud techniques and ways of protection,” Hafiz added.

These are highlights of the interview:

What do you think of the phenomenon of financial fraud on the global level and does the phenomenon represent a real threat to Saudi banks?

The phenomenon of financial and banking fraud is growing globally and it has set high record rates compared to previous years.

For example, according to a relevant report, the attempts of electronic penetration or what is known as electronic hacking at an international level has exceeded 5 billion attempts during the first quarter of last year alone.

This warns us against a wider spread of such phenomenon, which has become a danger and source of actual threat to the electronic financial transactions as a whole.

Also, the phenomenon of financial and banking fraud is witnessing record increasing rates. However, praise be to Allah, Saudi Arabia remained, to a great extent, protected against such phenomenon and other similar ones such as financial frauds.

In fact, the world is witnessing an attempt of fraud every about 14 seconds.

Unfortunately, swindlers and unscrupulous individuals are benefiting from the increasingly developed electronic financial and banking dealings and the ability to transfer funds among financial systems very swiftly in committing their crimes, a matter which has helped to increase this phenomenon and that is why it has become a threat to the world economy and financial systems.

The Saudi financial sector at large and the banking sector in particular constitute an important part of this world, which has become a single financial and commercial bulk and as such what constitutes a threat for parts of this bulk in terms of the electronic dealings also constitutes a threat to the majority.

Therefore, Saudi banks were extremely keen to follow the recent developments in respect of preventing electronic frauds and make sure that all preventive measures are taken in all fields of banking businesses.

What measures Saudi banks have taken to tackle this phenomenon?

Saudi banks follow precautionary measures (best practices) and invest a huge amount of money on an annual basis to develop and upgrade their information systems and related securities’ measures in order to insure that the electronic banking dealings are safe and sound.

Furthermore, there is continued cooperation with the competent systems’ security bodies in the Kingdom to confront these attempts in case they target banks’ clients.

The other measures taken by Saudi banks in this regard include launching banking awareness campaigns every year, which are targeted to increase the level of banking awareness of society in general and banks’ clients in particular regarding the sound grounds and rules when using banking electronic channels and banking cards such as ATM and credit cards.

Such annual campaigns are being undertaken to avoid the possibility of falling victim to fraud attempts.

Such campaigns, which are operated by Media & Banking Awareness Committee, a subcommittee of Saudi Banks’ Chairman Committee, are targeted to forward a clear and important message to society.

This message is aimed at restricting their banking transactions to their legitimate channels, abiding by the directives and instructions issued by the banks and reliable bodies, and the verification of all financial and banking messages or transactions achieving the highest degrees of caution to avoid being trapped in any fraud.

The awareness campaigns that are annually launched by Saudi banks don’t necessarily signify that the local banks are facing penetration of some sort to their banking systems or that the Kingdom and its financial system is witnessing a phenomenon related to financial fraud.

However, Saudi banks are aiming, through these awareness campaigns, to purify the environment of financial and banking dealings in the Kingdom from any attempt of fraud and swindling in addition to provide secured banking e-channels that allow banks’ clients to perform their banking transitions smoothly and comfortably.

Have there been any attempts to break the Saudi banks’ banking system?

Local banks did not witness any penetration operations to their banking systems.

In order to provide the necessary protection for their different systems, banks invest on an annual basis a huge amount of money for the purpose of developing and upgrading their systems.

Also, banks are committed to appling the highest international featured standards and the best practices to protect their systems.

Aiming to provide a high level of protection and confidentiality of the data contained in the various payment cards and to eliminate the risks of fraud, Saudi banks have adopted a well-known global security standard to their Payments Cards known as Payment Card Industry Data Security Standard (PCI DSS), which was adopted by all banks some time ago in order to grant more data and information security to clients when they are using payment cards such as ATM or credit cards.

The harmonization of Saudi banks with this standard and other standards related to information security represents a significant and important step toward raising the level of data security and the security of payment card operations performed by clients.

Commitment to these security standards always helps banks to monitor the data threats, enhance the methods of dealing with such threats and confront the risks of security penetration of the payment card’s data.

The process of applying the requirements of standards to the banking sector reflects a number of benefits, the foremost of which are making banks much more ready to comply with the other international security standards and strengthening the bases of the security strategies, and provides a good opportunity for recognizing means of enhancing the efficiency of the IT (information technology) infrastructure.

At Saudi banks, we would like to reassure our clients that the number of complaints that were received last year from clients related to financial and banking frauds were very limited, and at their minimum level.

Also, we would like to assure our clients that Saudi Banks will continue to adopt and apply the best practices in order to make sure that their systems are protected against different forms of electronic hacking.

In order to combat financial fraud, Saudi banks, have set up specialized departments and units to deal with potential financial fraud in addition to the fact that the Saudi banks during the year launched warnings for their clients for the necessity of avoiding some behaviors, which may make them victims of financial fraud operations.

The foremost of these behaviors, including but not limited to, was the response to phone calls or e-mails that require the updating of banking data and personal information.

This is because the only means for updating the banking data and personal information is through the branch network of the bank alone.

The banks also warned their clients against their response or reaction to the text or electronic messages, which claim the winning of cash or noncash prizes, and highlighted the necessity of deleting them promptly from their mobile phone and e-mail.

These reinforcements and strict controls against the operations of financial fraud, money-laundering and the funding of terrorism, followed by the Saudi banks, have put the Saudi banking sector among the most advanced banking sectors worldwide particularly in terms of the ability of the sector to combat the operations of money-laundering and funding of terrorism, including the different forms and types of financial fraud.

You’ve lately launched the sixth awareness campaign against banking and financial fraud, so what distinguishes this from those in the previous years?

Saudi banks were and are still keen to launch such awareness campaigns every year at the start of the summer and vacation seasons, considering that the summer vacation usually witnesses an increasing demand by banks’ clients on travel and tourism both inside and outside the country compared to the rest of seasons of the year.

This is accompanied usually by a noticeable increase in the rate of using bank cards in general and credit cards in particular, as well as the use of different electronic channels in executing various banking transactions, and in order to enlighten our clients on how safely they can use those cards and electronic banking channels, Saudi banks are intensifying such banking awareness campaigns.

The sixth banking awareness campaign titled “Do not disclose it” includes a variety of applications, such as newspaper ads, and road (LED) and radio ads, which are aimed to convey the banking awareness messages to the public at large and banks’ clients in particular.

It also focuses largely on taking advantage of social networking sites such as Facebook and Twitter channels.

This campaign is supported by a number of awareness seminars, workshops, lectures, and participations within a number of specialized events.

Activities of the sixth banking awareness campaign “Do not disclose it” will cover all cities and regions of the Kingdom.

One of the most prominent features of this campaign is its ability to pairing between the instructional and educational approaches.

This year’s campaign distinguishes itself as it is offered in a more interesting and attractive framework with many fraud stories simulations of which are drawn from similar events experienced by some banks’ customers.

Did the awareness campaigns implemented by the Saudi banks contribute to restricting the risk of exposing their customers to banking and financing frauds?

At Saudi banks, we believe that intensive awareness campaigns related to financial fraud awareness and ways of protections have contributed significantly to the prevention of financial fraud despite a significant increase in financial transactions through online banking channels.

For example, the number of transactions executed through SPAN & banks’ ATMs last year reached 1.3 billion and the amount of cash withdrawn reached SR685 billion.

In this context, the number of the bank customers’ complaints recorded last year reached 14,707, with an average of 3,676 complaints each quarter.

All these complaints are not necessarily complaints related to financial fraud.

Numbers of complaints become less than the average recorded by banks in the last two years — 2011 and 2012.

The decline in the number of complaints reached about 50 percent, confirming the high level of banking awareness among banks’ customers on the one hand, and the efficiency of complaints settlement centers in banks on the other, especially their ability to deal with complaints, which are settled rapidly.

The previous awareness campaigns achieved good successes, as they resulted in a remarkable interaction by all members of the community, particularly by bank customers.

Also, this was confirmed by the good decline in the rates of reported complaints and the positive feedback received by our customers.

What in your opinion is the reason behind banking and financial frauds?

Most of the incidents of financial fraud experienced by bank customers are due to their disclosure of financial and banking records and personal information.

This exposes them to be abused by criminals and fraudsters.

The customers’ negligence in disclosure of their banking data and credit card information, and their PIN numbers is mainly responsible for fraud to happen, especially in light of the rapid development witnessed by fraud operations and methods dependent on high-tech.

Therefore, we, in Saudi banks, require our customers to promptly report any unknown transaction in their accounts or credit cards without their knowledge or when they lose their banking or credit cards.

We also required them to report to us if they doubted that they were subjected to any fraud attempt so that the bank concerned will be able to take immediate action to suspend the card or freeze the account to limit the damages.

What advice would you give the Saudi bank customers, especially as the annual summer holiday is about to begin?

We request all customers of Saudi banks to exercise extreme caution when using credit cards during their travel and only use them at known and safe stores and shops.

Also, they should not disclose or reveal the card numbers or their secret numbers to others in order to avoid any fraud attempt.

We also request all customers, who are traveling abroad, to maintain their mobile phones whose numbers are registered at the banks in operation mode during travel in order to receive banks’ messages and to ensure receipt of prompt notifications of all financial and banking transactions which are carried out on their bank accounts or their credit card accounts.

This allows us to promptly deal with any fraud attempt on the accounts or use of the card by strangers or fraudsters.

Do you believe Saudi banks are on par with foreign banks in tackling such a menace?

By all means, I believe that Saudi banks are on par with foreign banks in tackling and dealing with the menace of fraud by continuing to protect their internal systems and also by continuing to make their clients aware of any new financial fraud techniques and ways of protection.

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