LAST week’s pronouncement from Bangko Sentral ng Pilipinas (BSP)’s Deputy Governor Chuchi Fonacier gives much food for thought.
She says that cyber attacks and electronic fraud increase during long weekends and holidays.
Agreed. We recall that during the 2016 Chinese New Year a cyber attack involving $81 million was inflicted on RCBC. Its ‘success’ was due largely to inadequate supervision by the bank.
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We live in strange times when it comes to the cyber policy of both banks and their clients.
On one hand, we are encouraged to become “cash lite” by doing more electronic banking, but on the other hand, we are warned about the wickedness of cybercrime. Many clients take a middle-of-the road approach whereby we cautiously employ electronic banking for utility payments but where we still persist with many cash transactions.
Visa did a survey recently which showed that cash transactions are on the decline. Agreed. But cash transactions may not reduce much further if financial institutions cannot convince us of the safety of electronic banking.
My current usage, by value, in percentage terms is:
Cash 40; Cheque 25; Debit Card 20; Fintech 15; Credit Card 0.
I cannot see cash transactions reducing very much in the near future. It is likely that I shall have less cheque transactions and more fintech but this depends on gaining more confidence in fintech. The jury is out.
Financial institutions that employ customer care officers are to be praised. My experience is that their prompt action in problematic situations has resulted in the avoidance of possible fraud.
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There is an interesting development with the insurance sector. This is the introduction of an on-line insurance marketplace. I hope this is successful, but there are pitfalls. One area of concern is that on-line systems tend to push for payment to be made rather early in the process where the insurance company needs to rigorously evaluate the proposal from the potential client.
Those encouraging on-line insurance admit that there is “plenty of stigma” around insurance. “A lot of people perceive it to be complicated, unaffordable, and difficult to purchase.” I would add that there is also stigma associated with fraud and corruption within the insurance sector and that potential clients’ lack of trust is a serious factor in reducing the size of the insurance marketplace.
In the past, there were those who spoke in terms of financial illiteracy as being a major factor in depressing the level of business. I never thought this was true.
If the insurance sector is replacing unscrupulous salesmen by reliable computer systems, then we shall all benefit./PN
