Malaysia banks to test pre-transfer fraud alerts in 2027

Malaysia’s banking industry and Payments Network Malaysia (PayNet) are developing a nationwide fraud alert system that will warn banks and customers before a risky transfer goes through, with pilot testing at selected banks targeted for the first half of 2027.

Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour announced the plan at the 16th International Conference on Financial Crime and Counter Terrorism Financing (IFCTF) 2026 in Kuala Lumpur on 6 October 2026.

The alerts are designed to stop fraud at the point of payment, rather than after money has left the victim’s account. “These alerts will prompt customers to pause, think, and verify before proceeding,” Abdul Rasheed said.

Most scam victims in Malaysia authorise the transfers themselves after being deceived through phone calls, fake investment offers or online shopping fraud. Once money moves through instant channels, it is often split across multiple mule accounts within minutes, leaving little time for recovery.

Abdul Rasheed acknowledged the system may cause friction and complaints. “However, these measures are necessary to strive for an appropriate balance between offering convenience and protecting customers from fraud, particularly those with high-risk status,” he said.

The new alerts will draw on infrastructure already in place. BNM, PayNet and financial institutions launched the National Fraud Portal in August 2024 to coordinate responses to scam reports made to the National Scam Response Centre hotline at 997. In October 2025, PayNet began piloting payment network pattern analysis to detect possible mule accounts, and has since flagged more than 1,600 suspicious accounts, many of which were later assessed as presenting new related risks.

“This demonstrates the potential of network-level intelligence by collecting information required by institutions to identify risks that may appear invisible from the perspective of any one individual institution,” Abdul Rasheed said.

The stakes are sizeable. Malaysia’s financial sector prevented approximately RM1.9 billion in attempted fraudulent transactions in the first half of 2026, exceeding the RM1.2 billion prevented across the whole of 2025. More than RM37 billion worth of assets has been recovered over the past five years.

BNM has also tightened the regulatory groundwork. The revised Risk Management in Technology policy document, issued on 28 November 2025, requires financial institutions to strengthen fraud detection, proactive monitoring and cyber resilience. A self-service kill switch that lets customers instantly suspend their accounts is among the required controls. A separate policy document on financial institutions’ response to fraud further reinforces fraud risk management while promoting responsible use of intelligence, analytics and technologies.

Customers can already take preventive steps. The Royal Malaysia Police’s Semak Mule portal allows the public to check bank account numbers and phone numbers against reported mule accounts before making a payment.

Looking ahead, Abdul Rasheed said the industry should move from head-to-head information exchanges towards structured transnational and technology-enabled partnerships. “Underpinned by trust, sound governance structure and secure information sharing mechanisms, the potential of both public-private and private-private partnerships can be powerful and enormous to advance intelligence-led financial transformation,” he said.