‘Social engineering is a real threat’ | The Express Tribune


Experts and regulators in the banking sector have called for widespread dissemination of awareness and technological solutions among customers and local people regarding social engineering frauds in the digital age to curb them. They made this call while addressing participants at a one-day conference titled “Financial Crime in the Digital Age”—addressing the growing threats of fraud and money laundering organised by Eastnets in collaboration with Dellsons Associates held at a local hotel in Karachi on Saturday.

“If somebody introduces himself as even the president of this country, don’t take calls, don’t respond, don’t answer, don’t say a word. Pakistan is possibly among one of the few countries that have amazing documents for identification – like the CNIC – which has a unique number. I have been exposed to amazing kinds of frauds in the last six months. We are not letting the system work properly,” said Federal Banking Ombudsman Sirajuddin Aziz.

He stated that technological solutions and customer awareness are two crucial aspects of combating the rising incidents of financial crimes across the country. He emphasised that banks should continue to upgrade their systems to strengthen the data security of their customers, in addition to bringing reforms to plug the loopholes in the practices and mechanisms that make the data of customers accessible to white-collar criminals.

Sharing cases of victims, he mentioned that victims of financial crimes in Pakistan are highly qualified, ironically, compared to fraudsters who are less educated but tactical in deceiving the public into providing their credentials to steal money from bank accounts.

Delivering a presentation on “Unmasking the Threat: Exploring Social Engineering in Digital Fraud,” Planet N Group of Companies Founder and Coach Nadeem Hussain said, “We need to help educate local people about social engineering frauds. When my team and I launched EasyPaisa 11 years ago, the most common transaction that gained popularity with EasyPaisa was domestic remittance. You could go to a grocery shop, give your CNIC, phone number, and a six-digit password of the beneficiary to collect the amount. Truly, it was the first financial revolution in Pakistan, as this revolution of the domestic remittance product changed the behaviour of millions of people.”

He highlighted that online transactions exceed paper [transactions] like cheques, etc. He called for creating customer awareness about digital fraud, as digital banks are facing cybercrime, hacking, and financial fraud.

Financial Monitoring Unit (FMU) Director General Lubna Farooq Malik said FMU is a specialised agency that looks after the collection of financial intelligence from various reporting entities, including banks, insurance companies, non-bank financial companies, microfinance banks, exchange companies, and designated businesses like real estate providers, jewellers, and accounting firms, as the net of reporting entities is very high.


She mentioned that whenever financial transactions take place, they [entities] report to FMU based on two criteria. First, any transactions worth Rs2 million or above done in cash are reported to the FMU as a cash transaction report, and secondly, the suspicious transactions (STR), meaning if a bank is suspicious about any amount or zero-amount transactions, they (bank) report to the FMU, as it is not as simple as it seems.

She added that with the passage of time, banks have developed a lot of capacity in terms of the STR system. However, challenges never end currently. “As far as digital crimes are concerned, we have multiple databases, including police, Federal Investigation Agency (FIA), Federal Bureau of Revenue (FBR), and others to analyse transactions based on suspicion or reports or queries from reporting entities or law enforcement agencies (LAEs). We have also formulated financial intelligence, which is a kind of report submitted to the LAEs concerned. We also support the investigations process. Despite strenuous efforts and works, there is always a room for improvement. Nowadays, we have collaborations with significant countries like UAE and South Africa, etc., helping the LAEs investigate someone in a better way,” she said.

“The volume of cyber-attacks globally more than doubled last year. Cybercrime is estimated to cost the world $6 trillion a year. The growth in instant payments and real-time transactions has driven financial services firms to implement real-time Artificial Intelligence (AI) data-driven solutions, which cannot be addressed by human intelligence alone,” Eastnets Founder and CEO, Hazem Mulhim said.

He highlighted that Pakistan is an emerging and important market for the financial sector, which keeps its system updated with advanced technological solutions to maintain its position on the white list of the Financial Action Task Force (FATF).

Published in The Express Tribune, November 26th, 2023.

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