MAS imposes additional S$330m capital requirement on OCBC over SMS scams
SINGAPORE — Singapore's central bank has imposed an additional capital requirement of about S$330 million on OCBC Bank, given the deficiencies in the bank’s response to SMS phishing scams in December 2021.
"OCBC is required to apply a multiplier of 1.3 times to its risk-weighted assets for operational risk. This translates to an additional amount of approximately S$330 million in regulatory capital," the Monetary Authority of Singapore (MAS) said in a statement on Thursday (26 May).
OCBC, Singapore's second-largest lender, said in January that it has completed making arrangements for S$13.7 million in goodwill payouts to 790 customers who fell prey to a text-message phishing scam impersonating the bank.
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"Financial institutions have a duty to put in place robust measures to prevent, detect and respond to scams," Marcus Lim, MAS' assistant managing director for banking and insurance, said in the statement.
“This means ensuring that their controls remain effective against evolving scam tactics, and prompt actions are taken as soon as a scam is detected.”
The MAS said it will review the additional capital requirement once it is satisfied that OCBC has addressed all the identified deficiencies.
In a separate statement, OCBC said an independent consultant was engaged to review its anti-scam systems and processes, as well as incident management and complaint handling. It concluded there was no cyber attack on its IT systems.
"The SMS phishing attacks impersonating OCBC in December 2021 was unprecedented in that the tactics reached a level of realism not seen in previous phishing scams," OCBC Group chief executive officer Helen Wong said in a statement.
"While we took various actions in December to stem the scam, we should have responded faster and better to early signs of the attacks," she said.
The bank has since implemented and will implement additional measures, including those recommended by the consultant as well as the ones jointly developed with the industry and the authorities, Wong added.
The additional capital requirements translates to a 0.21 percentage-point impact on OCBC’s capital ratios. The bank says that there will not be any impact on its dividend policy.