SG obliges banks to detect fraud in real time

The Singapore government’s new mandate for financial institutions to implement real-time fraud detection by mid-2025 is a proactive approach to combating the rise of phishing scams and unauthorized withdrawals.

This initiative, which is part of the Shared Responsibility Concept (SRF), requires banks to suspend transactions that rapidly empty accounts until they are confirmed by the customer, with the bank committing to a full refund if action is not taken.

Financial institutions must implement machine learning algorithms and rule-based systems to flag anomalies in real-time with automated mechanisms that alert the customer or suspend suspicious transactions.

There will be a mandatory cooling-off period for activation of digital tokens and restricted SMS sender IDs to reduce unauthorized account access through phishing.

The SRF facilitates collaboration between the financial, telecommunications and regulatory sectors by facilitating data sharing and consistent fraud reporting to improve threat detection and reduce response times.

This coordinated approach is consistent with recent trends of escalating cyber attacks on financial services, with Singapore’s banking sector seeing an average of 1,827 attacks per week.

As real-time fraud detection becomes the standard, this framework emphasizes not only fraud detection, but also providing a structured system-wide response to prevent unauthorized access and transactions.

This initiative reflects a broader trend in cybersecurity prioritizing a proactive and integrated approach that includes regulatory and cross-industry collaboration to protect assets and strengthen public confidence in digital financial transactions.