Tadawul implements biggest improvements in Saudi capital market history

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RIYADH: The Saudi Central Bank, SAMA, has ordered banks to suspend the ability to open accounts online for individuals or institutions as part of new security measures.

Under the new measures which will come into effect from April 10, accounts should only be opened through branches, the Okaz daily reported and local banks like Al Rajhi Bank announced on its Twitter account.

Other measures include limits on daily electronic transfers and suspension of international transfers for 24 hours.

SAMA has also asked banks to stop allowing non-Saudi customers to add payees online and to do so in person, according to a circular seen by Arab News.

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Banks are advised to apply more than one criterion to verify identity when requesting establishment of electronic services, changing passwords, issuing and activating cards and confirming the request by another channel such as a phone call.

The measures also include enforcing multi-factor authentication standards for every money transfer transaction for pre-added customers, and customers must manually enter the temporary or OTP password.

The new rulings come as an increase in fraud has been observed recently, through the impersonation of platforms that sell goods or provide services, with names of official entities, to obtain data from access to electronic banking services, explained SAMA in the circular.

Due to the significant and rapid development of financial services provided by banks through traditional and electronic channels, financial fraud has increased with different methods and forms for the purpose of illegal financial gain, SAMA added.

Identity theft, bogus recruitment, phantom investment, fake web pages or platforms, and internal fraud are some of the most prominent bank fraud operations.

Al Rajhi Bank took down its tweet hours after announcing the measures on its Twitter account.

The circular revealed many challenges that have contributed to increased fraud operations in the Kingdom.

Weak process control systems have created a challenge in early detection and reduction of fraud cases, with insufficient investment in anti-fraud systems infrastructure using artificial intelligence and customer behavior analysis.

Over 4.8 million accounts have been opened remotely without verifying that the customer ID number matches the user ID number on mobile. This represents 55% of all accounts opened remotely.

In addition, there is no procedure to verify that the IBAN and the beneficiary’s name match, the circular adds.

SAMA also called on banks to present a plan for further measures within five days to be implemented within two months.

These measures include investments in the infrastructure of anti-fraud systems.

SAMA has recently accelerated its efforts in the fight against fraud and scams.

Last year, he formed a team to investigate a bogus recruitment scam.


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