PETALING JAYA: Bank Negara Malaysia (BNM) is considering stronger safeguards for vulnerable consumers, drawing on overseas models that extend compensation frameworks to telecommunication service providers and digital platforms.
In its 2025 annual report released yesterday, the central bank said there is “merit” in broadening participation in fraud compensation, given the critical role of these players in the digital ecosystem.
This would further strengthen consumer protection and uphold accountability across all parties.
As part of these enhanced protection, BNM is assessing whether expanding the scope of the Policy Document on Ensuring Fair Treatment for Victims of Unauthorised e‑Banking Transactions (SEFT) would help address the risks faced by vulnerable consumers.
In October 2024, BNM introduced a compensation framework through SEFT, which currently focuses on unauthorised transactions. However, about 95% of online fraud cases in Malaysia are actually authorised transactions.
“At the same time, BNM recognises that potential behavioural changes from this expansion (of SEFT) could unintentionally compromise customer vigilance.
“This initiative forms part of multi-pronged efforts to combat fraud and preserve trust in our financial system,” the report said.
Since SEFT’s roll-out, BNM said it has seen encouraging signs.
Initial findings show that SEFT has made banks more accountable and transparent in investigations, as reflected by a roughly 26% increase in victims receiving full or partial compensation in 2025 compared to the previous year.
Banks have also taken proactive steps to strengthen malware defences, with some reporting zero malware cases in 2025.
This pre-emptively prevents unauthorised transactions, reducing the need for reactive compensation.
While progress is clear, BNM acknowledges areas for improvement, including navigating shared accountability amid evolving fraud risks.
“As implementation of SEFT matures, BNM expects increased consistency in how shared accountability is implemented. Such consistency will be key in maintaining trust in resolution outcomes.”
BNM also highlighted the need to improve access to alternative dispute resolution channels.
“Compensation offered by a bank is not the end of the process. Many customers remain unaware of their rights and channels available if they are not happy with compensation offered by the bank.”
Customers can dispute the bank’s decision by bringing their case to the Financial Markets Ombudsman Service, and banks must ensure this channel is clearly communicated and regularly reminded to customers.
