30 November 2023
Oliver Peterson: Joining me in the studios today is the CEO of the Australian Banking Association, Anna Bligh. It’s lovely to meet you.
Anna Bligh: Great to be here, Oliver.
Oliver Peterson: What brings you to Perth?
Anna Bligh: Well, I’ve got a few things to do with work here, and I was very keen to be able to have a chat with you about some of the things that are happening in banking that affect everyone’s lives. Lots happening at the moment.
Oliver Peterson: It’s been national Scam Awareness Week, these last couple of weeks. And I know the banks got on the front foot, because you want to make sure that there is just a little more rigmarole for customers which is important so their money and all their details won’t be stolen. What’s his new Scam Accord?
Anna Bligh: Well, I think every Australian wherever you are, is getting more and more bombarded by people trying to trick them out of their money. We get texts on our phones, we get messages to us on social media platforms, you know, criminals are out there wanting to trick people into transferring money to them somehow. So we’ve got to always be looking at new things to stay ahead of increasingly sophisticated, global criminal gangs. So we’ve combined with all other banks, including credit unions and building societies, to put in place some commitment across the whole of the industry whether you bank with the smallest credit union in Australia, or the largest bank. A number of things that we think will make a big difference, one, putting in place a brand new system over the next 12 months that will for the first time in Australia’s banking history accurately match account name to BSB and account number. Most people think that happens now but it doesn’t.
Oliver Peterson: So I could think I am depositing into Anna Bligh’s account, but in fact the account has changed to Oliver Peterson and all of a sudden the money goes into a different account. It should match up shouldn’t it?
Anna Bligh: Well look, yes, probably at some stage, although they do match your BSB to your account number. But we’ve seen increasingly a particular kind of scam where the scammers are intervening. So you’re my builder, you send me an invoice, but they intervene into that process of the invoice getting to me. It says ‘Olivers Builders’, so looks like a real invoice, but they’ve just taken your number, your bank account number off and put theirs on. What this needs though is a very big investment. Particularly so we get it right so that it would work for all the small players which is important and it needs to be sector wide. Otherwise your builder might bank with a building society, and you bank with one of the big four. So I think it will make a difference to that kind of scam.
Oliver Peterson: So it’s going to slow down potentially the deposit into somebody’s account and have a prompt in there just to say ‘hold on a moment is that actually who you think you’re paying the money to?’
Anna Bligh: Yes, in fact, most bank apps now, when you do the transfer, will tell you that the account name has not been matched. But most of us don’t read those things, we just kind of keep moving. In addition to that, where you are transferring to an account where everything might match, but the bank might have received advice that scammed money had gone into it, they might hold that payment for a bit of time. Right now those payments are real time instant and it means once it’s gone, it’s very hard to get it back. So there will also be a number of delays and warnings put in. We’ve become very used to instant payments, it will be a bit more friction in some cases for some customers, but it’s all designed to make them safer and keep their money where it should be; and that’s in their account. We’re not talking weeks or months, we’re just saying rather than instant it might be in some cases, four hours, it might be 24 hours in other cases. Just to make sure; is that actually a suspicious account? Let’s have a look at it.
Oliver Peterson: In the UK the banks now have a compensation model if somebody’s been scammed. Has that been floated in Australia?
Anna Bligh: It has been, and you can understand why people who’ve lost money would like the idea of just getting it all back and I understand that. Because some people lose just shocking amounts of money. But there is a good reason why no other country on the planet has followed suit. What it’s meant in the UK is that it’s become a real honeypot for scammers, and it completely dissolves all of us as customers for some basic responsibility for our end of the show. So it doesn’t matter if you give your pin away. It doesn’t matter if you transfer to someone you’ve never heard of before. And so what we’re trying to do in Australia, and what the Government is focused on and what a number of other players are, is it’s an ecosystem. The best thing for you is that you never get the scam text in the first place. You never get something that says oh, you’ve got to pay your tolls, or this is the ATO you owe us money, or the phone call that you get or you know, however the scam comes to you. Scams don’t come to you through your bank app or your internet banking. Scams come through your SMS accounts, through your social media, through Google search or search engines. We’ve got to stop it at that place, and then if it does get through and the money starts being transferred, that’s where banks come in. We’ve got to do better at making sure we can get the money back, and not send it where it doesn’t match up. One thing, which I think’s important, we’ve had two banks trial this over the last couple of months, they’ve just vetoed transfers of any kind in some cases to high-risk cryptocurrency platforms. Because more and more, we just see that these are the getaway vehicles for scammed money. And in some cases, they’ve said, well, where we’re not going to veto that particular company, but we’re not going to allow any one of our customers to transfer more than $1,000 a month for example. They’ve seen 30 to 40% drops in scam losses and scam compliance. So that’s in those two banks and part of this Accord is to make that happen across the entire sector. Now scammers will find some other way. It’s like whack mole, you know, as soon as you close the doors and lock them, they find another way to get in. But you know, that’s part of living in a digital economy.
Oliver Peterson: You said before the use of the app, is that going to be the way you see the future of banking? If not already, where we do most of our business through our banks app? And will that be the most reliable way to do it?
Anna Bligh: Either your app or your internet banking. Depends though, some people find one easier than the other, but some form of electronic banking is no doubt, well it’s not the future, it’s now. You might have seen data out today that cash is now being used for less and less and less transactions.
Oliver Peterson: It is harder to be transported around now.
Anna Bligh: Well yes, and we might come to that. But we’re forecasting that by 2030, only 4% of payments for goods in the economy are going to be using cash. So what that tells you is the other 96%. It’s either happening, via transferring money to you through my app, or I’m using my card or my wallet or my digital wallet or my smartwatch to tap and go. And that makes for a very different banking sector. More and more these companies are tech companies, they’re, they’re employing, you know, more coders and software engineers and people who write algorithms, use AI, to do basic banking, and to keep us as safe as they can.
Oliver Peterson: And it’s hard, isn’t it because it’s such an acceleration down that path. And a lot of us, I am very much a fan of using my phone and my app. But still the closure of bank branches, and then cash, is going to become a problem that will only accelerate for a lot of people over those next five years with those stats you just mentioned.
Anna Bligh: Well, yes and no, I would say in relation to cash, that without any doubt, people in Australia are going to use less cash. But that doesn’t mean we’re going to become cashless. We need to keep cash in the economy. One, there are a group of customers who prefer to use cash. And banks want to make sure that the customers who want it can get it. Two, even really low cash users. I’m a very low cash user, you know, I can’t remember when last time I had it in my wallet. But in terms of a natural disaster, or when the electricity goes out, when there’s an outage of some kind and we saw that a couple of weeks ago. People like to have some cash either in their wallet, in the biscuit tin at home to keep them safe. If something like that happens. And they are life and death circumstances. In a natural disaster, one of the first things that banks do, all of the major banks now have a pop up bank branch that they can put on the back of a truck and drive into a natural disaster anywhere in the country within a couple of days. And because if the electricity is out for a couple of weeks, people can’t buy food, medicine, nappies, petrol, you know, these are critical and essential. So cash is going to be around. A lot of us might be going to keep some of it in a biscuit tin, just to feel better and a bit safer. Others are going to use it for everything. And most of us are going to be in the middle there, only using it when we need to. But gee, when we really need it, we want it.
Oliver Peterson: And in terms of the future of bank branches, do you see a time where there’s a hub, and could that even be the post office?
Anna Bligh: Well, increasingly, it is becoming in some parts of Australia, the post office. Australian banks pay Australia Post to provide banking services to those customers who for whom a post office might be closer than a branch. But again, I can’t see a time any time soon that we’re not going to see a very big branch network in Australia. Yes, we’ve had some branch closures as fewer and fewer people are using the branch. But we still have more branches per capita in Australia than in equivalent places like Canada, New Zealand, the UK. So you know, it’s not like we’ve got no branches, we’ve got a huge footprint already. And it’s interesting one of the most common reasons that people regularly use a branch is to withdraw and deposit cash. So as they use less and less and less cash, including not just individual customers, but small businesses, this is really contributing to a massive drop off in branch foot traffic. You might have seen it here in Perth, but I certainly saw it on the eastern coast and the eastern states. When COVID hit a lot of small businesses, merchants, We didn’t know what was causing COVID, and people were worried genuinely about the safety of their staff and their customers if they were handling cash and they put up signs, no cash accepted. And certainly some businesses have gone back to accepting cash, but by no means all of them. They’ve learned for some businesses, depending on what they’re offering, not handling cash saves the business money keeps their staff safer. And they’re not going back. So the world took a big leap in a particular direction during COVID. And that’s causing a lot of ripple effects across banking and finance.
Oliver Peterson: Anna Bligh, we really appreciate you coming into the studios today, and we’ll chat to you again soon.
Anna Bligh: Great, thank you.
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