SINGAPORE – Banking customers may soon be able to keep their savings safer with a “money lock” which allows them to voluntarily set aside a certain amount which cannot be digitally transferred out. 

The concept of a “money lock” which they can opt into is being studied by the banking industry in Singapore as a means to empower consumers who can decide how much money they want to “lock” up, said Mr Frankie Phua, head of group risk management at UOB.

He added: “At least the bulk of your savings are safe. We use digital banking services because of the convenience… this allows us to limit our risk exposure and yet at the same time enjoy the benefits of digital banking.”

When asked how soon the “money lock” can be implemented, Mr Phua said the industry has studied this feature in detail and he hopes that some banks will be able to roll it out in one form or another. 

He was speaking to The Straits Times in the 10th episode of the Stop Scams podcast, which will be broadcast on Thursday.

The podcast is a series by ST to raise public awareness of scams. Since 2016, victims in Singapore have lost more than $1 billion.

Mr Phua also talked about the difference between authorised and unauthorised scams.

Authorised scams refer to transactions performed by customers using their banking credentials, such as in the case of love and investment scams. 

Unauthorised scams occur when customers unwittingly provide their banking credentials to the scammers, who then use those details to log into the victim’s account to make unauthorised transfers. 

Noting how most of the scam losses involve authorised scams, Mr Phua said: “When you think that you are transferring money to your lover, you authorise it willingly. It’s very difficult for banks to stop you.” 

Citing the case of a female customer in her 70s who lost almost a million dollars in a China official impersonation scam in 2022, he added: “The victim was quite confident she knew what she was doing.

“We actually got the police to go down to her residence and finally convinced her. But by then, a large sum of money had been transferred out.” 

During the podcast, Mr Phua also shared how UOB’s staff are trained to spot high-risk transactions, such as when they see a large sum of money being transferred. 

He said: “We use what we call a Spot framework. We sense that something is wrong, we probe (further), we observe how they react and then we take action.” 

In the light of how many scams have happened, Mr Phua said some people may want to lower transaction limits. 

“Naturally, there will be a knee-jerk reaction. But we should not be reacting this way. We should be coming up with measures that are effective,” he added.

“To be a Smart Nation, digitalisation is the way to go. Going forward, I think it becomes necessary for us… as we design any (bank) customer’s journey, we must always bear in mind what a scammer will think and what they will exploit.” 

Read ST’s Stop Scams articles at https://str.sg/wWt9