Asean urged to unite vs cybercrime spooking banks

With Asean integration in full swing, the banking sector in the region should be wary of rising cybersecurity concerns and intensify cross-border surveillance, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.

In a speech last Thursday, Tetangco noted of the closer regional economic integration’s advantages to the banking industry. For one, “transforming 10 Asean jurisdictions into a single market consolidates the strength of a growing region that saves more than the rest of the world and has the vast potential of a young population,” the BSP chief said.

Tetangco said, however, there were possible downside risks to this integration.

He said information held by banks have become hot commodities. As such, the industry should address challenges to keep them safe, he added.

“Cross-border commerce is literally consummated in a few keyboard strokes, which highlights how the human intervention part of fintech (financial technology) can possibly compromise prudential standards and create trouble,” Tetangco said.

He said banks should embrace the advantages provided by fintech, but “we still have to be wary of the cyber-security issues that arise, such as the increasing trend of phishing and identity theft cases.”

He said key to resolving cybersecurity crimes was effective cross-border surveillance and collective but preemptive actions.

“Unfortunately, that is not as easy as it sounds. Asean member-states are at different stages of financial market development. Furthermore, the 10 jurisdictions may very well respond differently to the same risk due to idiosyncratic factors in their local markets,” Tetangco said.

Under the Asean integration, qualified Asian banks (QABs) under the Asean Banking Integration Framework will “effectively extend the reach of one jurisdiction by having ‘outposts’ outside its national borders but still within Asean,” Tetangco said.

These banks then create a financial highway “that can harness the potential of Asean by developing the capacity to clear and settle intra-Asean trade and investments without depending on traditional correspondent banks,” Tetangco said.

QABs are Asean-headquartered banks and majority owned by Asean nationals that may operate in another Asean country.