Recent Fraudulent Withdrawals from DBS Accounts

Mrs Lina Chiam asked the Prime Minister in light of the recent fraudulent withdrawals from the ATMs of DBS Bank (a) what have MAS and the Association of Banks in Singapore done to prevent such incidents from recurring at DBS Bank and other banks; and (b) whether MAS is assured that DBS Bank has definitively identified the problem behind the ATM security lapses.

The Deputy Prime Minister and Minister for Finance (Mr Tharman Shanmugaratnam) (for the Prime Minister): Mr Speaker, Sir, the Monetary Authority of Singapore (MAS) expects all financial institutions in Singapore to have in place risk management processes and security controls to safeguard their systems and operating capability. Banks are required to take prompt action to rectify any vulnerabilities or weaknesses in their systems.

MAS has been working with the financial institutions since 2010 on a comprehensive programme to strengthen the security of payment cards. The programme includes measures to reduce the risks associated with the use of magnetic stripe ATM cards. Following the recent incident, the Association of Banks in Singapore (ABS) announced, in January 2012, that the industry will adopt the EMV standard in ATM cards to address the risk of card skimming. EMV stands for Europay, MasterCard and Visa. It is a global standard for payment cards based on chip card technology. The industry has said that it intends to adopt this standard to address the risk of card skimming by 2014. Its implementation will require infrastructural changes to the ATM networks, and will take two years for completion. In the interim, banks are putting in place additional layers of security to enhance the protection of their customers' bank accounts. These include disabling overseas withdrawals unless requested by the customer, SMS alerts for cash withdrawals above a certain threshold and replacing ATM cards that are assessed to be at risk. Banks are also strengthening their internal surveillance. MAS has urged banks to implement the new measures as soon as they can, even ahead of the industry's target timeline, where possible.

DBS has assured MAS that it is treating the issue of fraudulent withdrawals with utmost priority. MAS has required that the bank reviews all control processes to minimise the risk of ATM fraud, and will assess the adequacy of the measures being taken. MAS will continue to work with the industry to enhance security measures to safeguard the integrity of consumers' bank accounts.

Mrs Lina Chiam (Non-Constituency Member): Sir, I would like to thank the Minister. I would just like to ask one more question. Will the Government make it compulsory for all banks to put in this magnetic computer chip? Will it be a compulsory exercise?

Mr Tharman Shanmugaratnam: Thank you. So there is a distinction between the magnetic stripe technology which has been the prevailing method and the EMV chip-based cards which they are moving towards. They intend to move by 2014. This roadmap to increase the security of the system has been worked out, together with MAS, over the last few years. We expect all banks coordinated by the Association of Banks (ABS) to comply with this new standard by 2014 and preferably earlier, if possible.

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