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Westpac cracks down on scammers with new tech – will other banks follow?

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Westpac will tackle sophisticated scammers with new AI-powered tech that sounds the alarm bells to customers before they transfer big sums.

The announcement comes as 8 of 10 Aussies reveal they've been targeted by a scam attempt, according to Finder research.

Westpac SaferPay aims to significantly reduce customer scam losses through a series of automated prompts that customers have to answer, with a goal of disrupting the urgency of the transaction and encouraging customers to think about whether the payment is likely to be a scam.

The new feature seeks to save customers millions of dollars in scam losses, says Westpac CEO Peter King, by adding

"important friction to payments deemed to have high scam risk."

"Our prevention measures have led to a considerable drop in customer losses over the last year, [but] fraudsters are still taking millions of dollars from our customers each month," he says, listing fake investment offers, impersonation calls and texts, and intercepted emails as the main culprits.

"Westpac SaferPay presents customers with a series of questions in instances where we detect a payment has high scam potential. The presented questions will vary for each customer, tailored based on the information the customer provides."

"Very promising" tech to stamp out scammers

The tech sounds "very promising" to investment scams educator Wadzanai Nenzou, founder and CEO at Herconomics, as it could put a dent in the amount of money transferred to scammers.

"It could be an effective way to stop the transfer of funds to scammers in real time," she says.

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"As to whether it will have a meaningful difference over the long term depends on how honest customers will be when answering the questions, as the feature's effectiveness depends on the customers answers to specific questions – and it also depends on how scammers will adapt and try to bypass this new feature."

If it proves effective, Nenzou says the biggest difference impact would be felt if it influences similar scam security features to be rolled out by other banks "not just in Australia, but worldwide".

Late last year, the Australian banking industry came together to launch the Scam Safe Accord, designed to provide better scam protection for customers.

A major goal of the Accord is the rollout of name checking technology, so customers know who they are dealing with, reducing the possibility of people being manipulated into paying a scammer when the name does not match.

"The Scam Safe Accord is a significant step forward… but to truly make Australia a hard target for scammers, we now need to apply the same protection across the entire scam ecosystem," says King.

"So long as scammers can freely operate across mobile phones, web browsers and social media platforms, Australians remain vulnerable to scams."

Scammers user pressure to create urgency

Westpac says they have invested more than $100 million in new detection and prevention measures over the last 2 years.

At NAB, the Big 4 bank says customers reported an average of 1,500 scams cases every month in 2023, with around 70% of scams involving some form of impersonation.

Laura Hartley, NAB Manager Advisory Awareness, said almost all scammers relied on creating a sense of urgency to pressure unknowing victims into taking action.

"Scammers create a sense of urgency to encourage you to act quickly.

"It could be a phone call from your 'son' or 'daughter' in distress and needing money, a fantastic term deposit rate that's only available for a limited time or cheap concert tickets going quickly," she said.

But Nenzou is optimistic that technology like this can help combat the increasingly sophisticated ways that scammers are working to seperate everyday people from their hard-earned money.

"I hope the Westpac SaferPay security feature puts pressure on other banks to roll out something similar," she adds, "because I think it's vital for banks to collaborate and motivate each other to create scam-fighting tools. When it comes to fighting scams, I believe in major collaboration as the only way forward for everyone."

Scams are getting more sophisticated, but you can take steps to learn how to identify a phishing scam or protect yourself against credit card fraud.

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