Aussie banks face hurdles against ‘heartbreaking’ scams

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Australian banks are hampered by muddled troves of data in their pursuit of protecting customers from scams, a leading Australian and New Zealand tech company says.

Atomic.io has set up in-app prompts for the major New Zealand banks, in the entrepreneurship-rich country.

Australian banks are trying to get away from easily-mimicked SMS and email communications with customers, but stacks of messy internal data and systems are holding back the banks from streamlining and automating anti-scam measures, Atomic.io says, as it embarks on a project with CommBank subsidiary Bankwest.

In-app communication was far more secure for customers, Atomic.io marketing head Matty Sirois said, so generally speaking Australians banks were on the backfoot in the race to get into the more secure method of communication.

Research commissioned by the company shows customers’ fear of scams is heightened by artificial intelligence.

“This report shows (banks) assume customers are stressed out by scams, but this report shows that they no longer trust and no longer can even recognise them as a scam or not because of the tech,” Mr Sorois said.

“They no longer trust these … traditional channels: email, SMS and phone.

ACCC data shows Australians lost $567m to scams in 2022, and $476m last year.

“Behind every dollar lost to scams is a heartbreaking story – we are working hard to intercept these malicious criminals before they can inflict pain on innocent Australians,” Financial Services Minister Stephen Jones said in March.

Wellington-based Atomic.io has made action cards in the apps of New Zealand’s major banks; those prompts which show up asking “are you sure: yes or no” or giving similar queries.

But a larger population brings a key hurdle for the Australian banks, Mr Sirois said.

Westpac announced this week it could spend up $2.8bn to slice its internal systems from 180 to 60.

“If you don’t have your data clean, you can’t do automation,” Mr Sirois said.

“Clean” means no duplications or incorrect details in a bank’s gargantuan database.

And the banks need automated in-app communication because email and SMS are particularly vulnerable to scams.

Last week, Westpac announced a new in-app, AI-powered questionnaire which would pop up if a suspicious transaction was made.

“The big banks … they’re using foundation steps. ANZ and CBA do some stuff in-app but not enough, they still rely on other channels,” Mr Sirois said, though commended Westpac’s new feature, which his company had no hand in.

“I ignore anything that looks like it’s from (my bank) that is from a phone call or an email,” he said.

Reports of text message and email phishing scams to the ACCC last year far outpaced phone call phishing.

CommBank, ANZ and Westpac advise they will never ask you to provide sensitive information via a link sent by email or text message.

But almost all NZ banks no longer send web links via text message. NAB nixed links in text message mid-2023. Singaporean banks removed links in 2022.

This is because artificial intelligence has made rapid-fire, widespread bank-impersonating emails and text messages a relentless tool for scammers.

Atomic.io says it can build action cards within a bank’s app much faster than the banks.

ANZ and Westpac’s New Zealand arms, BNZ and Kiwi Bank, use the firm’s technology, and Mr Sirois says the company is in early talks with Commonwealth Bank subsidiary Bankwest.

Research on 1000 Australians and Kiwis, commissioned by Atomic.io, found about 33 per cent received a scam email daily, and 64 per cent got one at least weekly.

People who had been scammed often preferred subsequent in-app messaging, the research found.