BSP boosts security versus cyber attacks

posted June 06, 2016 at 11:40 pm
by  Bloomberg
By Siegfrid Alegado

The Bangko Sentral ng Pilipinas is expanding its cyber-security unit, placing banks and money changers under tighter scrutiny, and will start to regulate digital currencies to ward off laundering and technology crimes.

The central bank will tighten its oversight of foreign-exchange dealers and remittance companies in the next two to three months, Deputy Governor Nestor Espenilla told a forum in Mactan City, Cebu, on Saturday.

Virtual currencies like bitcoin, which are currently unregulated and are used in transactions that have increased to at least $2 million a month, will be covered by a 2005 circular that will be amended, he said. Espenilla said he estimates that the Philippines is the third-largest user of bitcoin, partly because of the volume of funds sent by Filipinos working overseas, which last year climbed to $25.8 billion.

The Philippines has been in the spotlight after one of the largest bank heists in modern history, where thieves hacked into Bangladesh Bank’s account at the US Federal Reserve in February and routed $81 million to accounts at Rizal Commercial Banking Corp. The funds were transferred by a remittance company into gaming halls.

The central bank is bolstering defenses and imposing more stringent rules “in light of recent developments,” Espenilla said. The regulator will require financial institutions to strictly run checks on their customers at all times, Espenilla said.

“While technology helps in providing financial services, there are risks like money laundering and compromising consumer protection,” he said. “These are old risks in new hands.”

Separately, Philippine banks had suffered “small and manageable” cyber-attacks, Espenilla said last month after Swift, the global inter-bank messaging system, said hackers had struck again.

“In terms of the KYC rules, the regulations are already there,” the deputy governor in charge of bank supervision said in an interview after the briefing. “We’re tightening our oversight over banks’ fulfillment of those policies.”

The central bank is also evaluating lenders’ proposal to allow a higher level of undocumented foreign-exchange transactions with residents from the current $120,000 cap. That would mean less dealing on the black market and more on the formal spot market, which is easier to regulate, Espenilla said.

Topics: Bangko Sentral ng Pilipinas , BSP boosts , security , cyber attacks , digital currencies , money laundering , technology crimes
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