Central Bank Of Kuwait Creates An Anti-fraud Room To Boost Security

According to Al-Rai daily, the Kuwaiti Central Bank has asked Kuwaiti banks to inform it of the latest developments on the establishment of a central room that will deal with cases of electronic financial fraud, working 24/7. According to the bank, it may be useful to note that representatives of the Union of Banks, the Public Prosecution, the Ministry of Interior, and the Communications and Information Technology Regulatory Authority (CITRA) must be part of the coordination team for establishing the ‘Chamber’.

Reliable sources told the CBK that the last meeting resulted in four main issues, which can be limited to:

- Achieving the target – The banks are almost ready to establish the required "chamber", while the current open discussion is related to the appropriate technical and human mobilization. Each bank will have a specialized team capable of achieving the goals of the "chamber", receiving financial fraud reports, following them up, and dealing with them efficiently and quickly, as each bank will assign specific employees to perform these tasks. To ensure that it does not happen again, the banks coordinated with the appropriate authorities to take precautionary measures. According to the sources, a preliminary vision has been developed to limit electronic financial fraud operations, establishing a mechanism to deal with banking reports with the Interior Ministry, freezing decisions with the Public Prosecution, and implementing a mechanism for dealing with telephone numbers and Internet websites in fraud cases with CITRA, while suggesting that construction of the "chamber" will begin in two weeks.

- Freeze funds – During meetings with their coordination team representatives, the CBK received reassurances from the prosecution that they are working on expediting procedures to freeze funds derived or suspected of being the result of fraudulent operations. The bank is more prepared to respond as soon as possible to requests for banking permission to block suspicious funds until they are disposed of and returned. Although the prosecution's assurances to the banks did not include any indication that a specific department had been allocated to these cases and that the matter was still limited to increasing the working hours allocated to this scope, the move dispelled banking fears that client funds would be frozen without the prosecution's permission, which is usually completed in three business days.

- Local operations - The banks stated that any immediate freezing of fraudulent funds will be limited to the movement of funds within Kuwait. The "Chamber" will not be able to implement the plan if the "hacker" convinces the victim and withdraws his money in overseas transfers or in online purchases. The urgent measures that you will take locally are to freeze the amounts of these operations immediately. Basically, if a person is defrauded and their money is transferred to another local bank, the receiving bank must freeze the funds in preparation for returning them to the victim client's account after obtaining permission from the prosecution to freeze immediately.

The bank with which the customer's account is opened will, however, be forced to activate its traditional procedures if the "hacker" succeeds in luring him by transferring his funds directly abroad or directing him to make "online" purchases. This includes contacting the intermediary bank to stop the flow of funds from one party to another. The success of the procedure will depend on many factors, including the speed of reporting.

- Withdrawal of money – Even if the transaction involved two local banks, the bank receiving the money may not be able to freeze the fraudulent amounts immediately. In the event that the “hacker” is able to withdraw the “cash” amounts before the prosecution issues permission, he may simply deposit the amount into a bridge account so that he can withdraw the amount. Timed or transferred “online” at a speed exceeding the response time of the “chamber”. It is noteworthy that the "Central Bank" has asked "CITRA" to take the necessary measures in relation to fraudulent operations using phone numbers issued by it

To use means to prevent fraudsters from impersonating official institutions by telecommunications companies operating in the country, including requiring telecommunications companies to display the full name of the contacting party on their website, a phone screen to reduce the impersonation of bank and government employees, and a phone screen for communication with legal entities.

As many services and businesses have become available digitally in the past three years, the establishment of the expected “chamber” will probably become even more significant because financial fraud operations have increased significantly at significant rates in recent years. As a result, cybercrime has increased, particularly fraud operations that attempt to steal banking and personal data to gain access to people's money.

Financial fraud has spread in many ways recently, including fraudsters posing as officials or banks and requesting personal information.

The Central Bank of Kuwait recently published data showing that the number of cases of fraud on bank cards at local banks increased by six times last year. According to reports from local banks, fraud on bank cards has been increasing every year. As part of its efforts to reduce electronic financial fraud, the Central Bank has held a series of meetings with banks since March 2023.

 

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