Singapore banks to allow customers to ‘lock up’ funds in latest move to guard against scams

SINGAPORE: As a further step to guard against rising scam cases, Singapore’s three local banks will soon allow their customers to set aside and “lock up” a certain amount of funds that cannot be transferred out of one’s account digitally.

DBS, OCBC and UOB told CNA that they will be rolling out their own versions of a “money lock” by next month.

The concept of a “money lock” has been studied by the banking industry to guard against rising scam cases, said Minister of State for Trade and Industry Alvin Tan in parliament last month.

Such a feature will allow banking customers to set aside a certain amount in their accounts that “cannot be digitally transferred out without strict authentication measures”. 

“This will further help to limit losses against scams,” he said in response to an adjournment motion on measures to protect banking customers against scams.

In a press release on Friday (Oct 6), DBS announced the upcoming roll-out of a new banking account – called digiVault – that will adopt a “digitally in, only physically out” approach.

This means that customers will be able to make fund transfers digitally into this new account, but not for outgoing transactions.

With customers’ funds being unable to be accessed digitally, the new digiVault will help to prevent scammers who gain unauthorised access to customers’ phones and accounts from performing fraudulent digital transactions, DBS said.

The bank added that funds in the upcoming digiVault account – set to be launched by the end of November – will only be accessible when customers verify their identities.

One such way is to have customers visit a bank branch with their proof of identity, such as an IC or passport. In addition to in-person verification at bank branches, DBS is exploring other options which will be announced next month.

“digiVault is akin to a virtual safe deposit box in a vault,” said the bank’s Singapore country head Han Kwee Juan. “The funds in the account are locked away and will give our customers peace of mind that it cannot be accessed digitally.”

UOB AND OCBC TO ANNOUNCE SIMILAR FEATURES

In response to CNA’s queries, the other two local banks said similar moves are on the way.

OCBC said it will implement a “money lock” feature – which allows customers to “ringfence an amount from their account balances that cannot be digitally transferred out” – on its banking app by end-November.

When rolled out, a “cross-channel authorisation measure” will be needed to “unlock” the ringfenced funds, said Beaver Chua, head of anti-fraud at the bank’s group financial crime compliance.

For example, a customer will have to perform the unlocking function on a different platform other than the app, such as at an OCBC ATM.

OCBC said a “robust and secure measure to unlock the ringfenced funds” must be in place amid the prevalence of scams, but such moves “may inevitably introduce friction in banking”.

“As with any security measure, and listening (to) our customers’ feedback, we will always endeavour to achieve the right balance between protecting our customers, and customer experience,” Mr Chua said.

Over at UOB, the bank will also roll out its own version of a “money lock” by November after studying the concept closely.

“We believe that the money lock can be an effective tool to limit risk exposure online as it is able to ringfence a portion of funds as designated by the customer from digital transfers or intrusion,” said the bank’s head of group compliance Daniel Ng.