Australia’s commercial and mutual banks, credit unions and building societies have committed to a new Scam-Safe Accord that outlines a set of actions and practical initiatives to protect their customers and harden their systems against scams.

Banking sector peak bodies, the Australian Banking Association (ABA) and Customer-Owned Banking Association (COBA), who collectively worked to develop the Accord with its members, note that the initiatives are rooted in the principles of “disrupt, detect and respond”.

The six key measures outlined in the Scam-Safe Accord include:

• An industry-wide ‘confirmation of payee’ solution
• Biometric checks to prevent misuse of bank accounts
• Warnings and payment delays to alert customers to potential scam payments
• A major expansion of cross-sector intelligence-sharing
• Limiting payments to high-risk channels
• The implementation of an Anti-Scams Strategy, to enhance oversight of the bank’s scams detection and response.

One of the standout measures of the Accord is the banks’ collective agreement to develop a new industry-wide ‘confirmation of payee’ system, with the industry committing $100 million to build and deploy the payments protection system.

The system will be designed to protect customers from misdirecting payments to the wrong recipient, effectively enabling payees to confirm that they are transferring money to the person they intend.

The system, banks say, will “[mitigate] the possibility of people being manipulated into paying a scammer when the name does not match”.

All Australian banks have committed to deploying the new system, which will begin its design phase immediately. The system is mooted for rollout over the course of 2024 and 2025.

COBA and the ABA note that the introduction of such a system is a “considerable undertaking”, noting that 15.4 billion transactions worth $2.5 trillion occur every year across the banking sector.

As part of the Accord, Australia’s banks have also committed to introducing new and higher protections into their systems to prevent scam payments, which would likely see customers receive more questions, warnings and delays when paying someone new or when increasing payment limits.

The banks say they will introduce these enhanced warnings and delays by the end of 2024, which will serve “as a mitigant when scammers put customers under pressure to act quickly to transfer funds,” the Accord states.

Customers have also been warned to expect more banks to start limiting payments to high-risk channels, including cryptocurrency platforms, which are frequently used to move money out of Australia. Once sent to a crypto exchange, these funds are virtually impossible for banks and law enforcement authorities to reclaim.

Banks have also agreed to collectively uplift their technology and controls, with each of the majors to introduce biometric checks for new account openings by the end of 2024.

These checks will involve either behavioural biometrics – with an array of technologies available today to detect anomalous typing rhythm, mouse movements, gait, and voice – or the checking of a customer’s face or fingerprint to verify their identity.

The Accord also includes a major expansion of intelligence sharing across the sector, with a promise to increase the speed of intel exchange.

All banks will be required to join both the Australian Financial Crimes Exchange (AFCX), a financial and cyber-crimes intelligence sharing partnership involving the major banks and law enforcement agencies, by mid-2024, and the Fraud Reporting Exchange by 2025. The former will compel banks to make use of AFCX intelligence to improve their scam suppression activities, while the latter will be used to help customers recover stolen funds.

Australia’s big four banks CommBank, Westpac, NAB and ANZ have declared their backing of the Accord, noting that, as ABA members, they have each played an active role in its development.

Westpac chief executive Peter King declared the initiative “one of the biggest technical uplifts for Australian banking in recent times” that will ensure “Australians with bank accounts will be significantly more protected from scams.”

ABA chief executive Anna Bligh said the Accord delivers a “new offensive” capability for the banks in their “war on scams”.

“It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams.”

She added: “Recent data from banks shows that $600 million in stolen funds has been returned to customers over the last year. To keep up this effort it is critical that government, banks, telcos, social media and crypto platforms work together as part of an eco-system to stay one step ahead of sophisticated criminal gangs”.

COBA chief executive Mike Lawrence said the initiatives launched today “are a significant step forward and demonstrate the banking industry’s commitment to fight scams”.

“It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country, customers can be confident their bank is working hard to protect their money.”

He added: “Preventing scammers from taking the hard-earned money of everyday Australians is a shared responsibility. As scammers work hard to devise new ways to steal money, it’s critical that governments, industry and consumers remain vigilant to make Australia a hard target for scammers”.