As more and more people started to rely on digital transactions during the pandemic, incidents of banking fraud and other forms of cybercrime also rose in number in the Philippines.
According to the Bankers Association of the Philippines (BAP), an estimated P1 billion worth of deposits got lost in 2021 due to financial cyber crimes that resulted in numerous unauthorized withdrawals and money transfers.
This is further supported by the Anti-Money Laundering Council, which reported that between March to August last year, fraud cases and unauthorized bank transactions made up about half of all the suspicious transaction reports by covered institutions.
Cognizant of such concerns, the UnionBank of the Philippines, Inc. recently signed a memorandum of understanding with listed fiber internet provider Converge ICT Solutions, Inc. in an effort to fight online and financial cybercrimes in the country.
The agreement was announced during the inauguration of UnionBank’s Innovation Campus in San Pedro, Laguna where Converge and a number of other telecommunication companies (telcos) joined the call for an industry alliance against online criminals operating within the banking and financial systems.
Jose Paulo G. Rufo, Chief Information Security Officer and Data Protection Officer of UnionBank, said that the pandemic is what helped kickstart their resolve to fight bank fraud as they usher in the growth of their digital channels. In December 2019, the bank became one of the 11 recipient accounts in a series of cyber attacks that saw the unauthorized transfer of deposits from a major bank to other financial institutions.
“[During the pandemic], these cybercriminals saw an opportunity to take advantage of Filipinos who are digital migrants — first-time to use digital services and are not really familiar with the concept of phishing, scams, text, and spam,” he said in a press release. “So we continue to make sure that we are able to fortify our cybersecurity measures, and it’s a high priority for us.”
Spike in financial fraud in PH
Paulo Martin G. Santos, Chief Network Transformation Officer of Converge, said, “Based on available data, we have seen a spike in financial fraud. We commend UnionBank for spearheading this initiative as we help prevent more Filipinos from being victimized by online fraud,” he said.
The executive added that the banking and finance industry is one of the most vulnerable sectors to online fraud.
Santos reported that for this year alone, Converge has already blocked more than 4.1 million unique web addresses tied to illicit content and bank fraud. This, according to him, is one clear proof that the banking industry is the second top industry affected by cybercrime.
The company’s assessment jives well with a report made by the Bangko Sentral ng Pilipinas (BSP), which revealed that 13% of the 20,000 consumer concerns they received in 2021 had been about fraudulent and unauthorized bank transactions.
Data protection in times of the pandemic
Converge ICT said that the recently signed memorandum of understanding, which gives the listed fiber internet provider limited access to UnionBank’s customer data, is in line with the advisory opinion issued by the National Privacy Commission (NPC) that allows for the sharing of relevant data for investigation.
According to NPC, the extraordinary challenges that the country is now facing due the global pandemic has made the processing of personal data necessary so the government can take appropriate measures to contain the spread of the virus and subsequently, mitigate its effects.
Republic Act 10173 or “Data Privacy Act of 2012,” which was signed into law by then President Benigno Aquino Jr., aims to protect the Filipinos’ fundamental right to privacy of communication while ensuring the free flow of information to promote innovation and growth. One of the goals of this law is to protect an individual’s personal information from unauthorized processing by any natural or juridical person.
“The idea of data privacy as an enabler is important because we as data subjects also depend on various technologies to protect our personal data,” said Leandro Angelo Y. Aguirre, Deputy Commissioner of NPC.
He added that users must learn how to utilize technologies such as encryption, privacy settings, and other authentication tools to assess the risks of any possible cybercrimes.