Clari5 Market Insights


Bangko Sentral ng Pilipinas

BSP Mandates Philippine FIs to Implement Fraud Management System to Curb Financial Crime

By when must banks comply with the mandate?

FIs must be operational with Fraud Management Systems by 31 December 2022.

Why has BSP issued the new mandate?

BSP has observed an increase in hacking and malware attacks by 2,324% and an increase of 302% in phishing and social engineering schemes between 2019 and 2020. Credit card frauds rose by 21% since 2020. All this resulted in a loss of 2 bn pesos. In March 2022, BSP issued Circular No. 1140, Series of 2022 – Amendments to Regulations on IT Risk Management – to strengthen cybersecurity measures to minimize losses in the financial ecosystem and increase consumer confidence in electronic finance.

Highlights of the mandate

The circular details important requirements to be followed by Philippines FIs while implementing a Fraud Management System (FMS) –

  • Advanced Capabilities: Implementation of automated real-time fraud monitoring and detection systems with capability to block suspicious/fraudulent online transactions
  • Risk Commensurate: Systems to be commensurate with risks associated with digital financial and payment platforms
  • Future-oriented: FMS should be capable of constant calibrations for emerging fraud patterns, and transaction surges
  • Behaviour Profiling: Systems must capture behaviour patterns of the customer and create behaviour profiles
  • Omnichannel Solution: Collect, monitor, analyze transactions from all sources into a single risk advice view
  • Integrated FMS to be integrated with AML systems for comprehensive view of financial crime rings
  • Consumer Education: Continual awareness programs for customers on secure use of electronic payments and the risks involved

How Clari5 helps Philippine FIs quickly comply with BSP’s mandate

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