Bank of Russia improves system for identifying unauthorised fund transfers

In 2018, the Bank of Russia identified over 400 thousand unauthorised transactions totalling 1.38 billion rubles. The previous year, 317 thousand such transactions were identified totalling 961 million rubles. This growth is related to increased transparency of information banks provide to the regulator about unauthorised transactions.

Banks are now required to inform the regulator about all unauthorised transactions and the reasons therefor using a new reporting form. The Bank of Russia’s new requirements facilitate the creation of more effective information security systems in credit institutions that will boost the detectability of unauthorised transactions and protect the funds in bank accounts.

More than 80% of the identified unauthorised transactions (coming to over 1 billion rubles) were carried out online and via mobile devices. Swindling personal information out of customers (social engineering) with the subsequent use of such data to steal funds was behind 90% of the unauthorised transactions.

For the first time, the new reporting system allowed the regulator to obtain complete information about how banks reimburse clients for stolen funds. For instance, in the third quarter of 2018 (after this parameter was introduced into the reporting requirements), banks returned 230 million rubles to their clients. The data for the fourth quarter will be aggregated shortly.

The transparency of information about unauthorised transactions is increasing on the back of general growth in the number of payment card operations: in 2018, they amounted to 32 billion rubles vs 24 billion rubles the year before.