Fast pay crime risk
Incoming payments should appear faster in many people’s bank accounts from November next year, but what’s good for e-commerce could also benefit cybercrime.
ANZ chief operating officer Mike Bullock said a Reserve Bank move to flush all payments through the banking system within the hour was positive, but banks would have to step up their defence.
Otherwise there would be an increased risk of scammers siphoning off stolen funds before their crimes were detected, he said.
Bullock forecast there would be more attempted fraud when the change came in, but said ANZ was deploying more defences, only some of which customers might see.
ASB began remitting funds to other banks and clearing payments within the hour in 2012.
But Bullock said ‘‘a bit of smoke and mirrors’’ was involved as ‘‘interchange’’ – the process by which banks finally settle up between themselves – occurs only five times a day.
ASB now phones customers if they write cheques above a certain amount, and Bullock said that was the type of check that might become more common.
Payments NZ studied 15 countries, including Britain, which have already begun processing bank payments in realtime, or close to it, and said fraud was one of the challenges.
But Massey University banking expert David Tripe said most of the heightened risks would fall on banks themselves, rather than customers, and the upside was that people should receive incoming payments faster.
Faster payments are on the way because the Reserve Bank needs to replace the ageing Exchange Settlement Account System and NZClear computer systems that settle transactions between banks.
Between them, the systems process more than $30 billion every day.
The Reserve Bank said a year ago that the computer servers on which the systems ran had only two years of remaining support life and the software had ‘‘ongoing upgrade requirements’’.
It decided to join other developed economies in moving towards a more real-time settlements regime at the same time as replacing the systems.
Spokesman Angus Barclay said if banks were fighting fraud by detecting suspect transactions before they transferred funds, then the changes would mean they would have to act faster.
Payments could not be ‘‘clawed back’’ after interchange or the financial system would fall over, he said.
But Barclay said it was better to have ‘‘money moving than sitting dormant, even for a few hours’’.
Any delay between a payment being authorised and concluded increased other risks in the financial system, for example by increasing the knock-on effect of a bank failure.