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Basel Committee publishes discussion paper on digital fraud

Source: Bank for International Settlements

The Basel Committee on Banking Supervision is today publishing a discussion paper on digital fraud and banking.

Technological banking advancements can both provide benefits and present risks to bank soundness and financial stability. One such example is digital fraud: criminals are exploiting digitalisation to commit online fraud on a greater scale and scope than previously. Fraud risks have also evolved in response to the Covid-19 pandemic.

This discussion paper provides a high-level assessment of the supervisory and financial stability implications of digital fraud for the global banking system. Its purpose is to elicit comments and feedback from a broad range of interested stakeholders. It is structured around three broad sets of questions:

What is digital fraud? What are its main defining features? How does digital fraud affect banks and how should policymakers think about it?

What are the supervisory and financial stability implications? How are supervision and financial stability affected by digital fraud? Why is digital fraud of relevance to the Committee and its mandate? What empirical data are available to assess its magnitude and prevalence?

What is being done to mitigate digital fraud risks within the banking sector? What initiatives have been pursued, or are planned, at the domestic, regional and global level?

This discussion paper is intended to provide a high-level assessment of these questions. It is not a comprehensive and exhaustive analysis of digital fraud. The empirical analysis included in this discussion paper is based on readily available data.

The Committee welcomes comments from a broad range of interested stakeholders on the discussion paper, including the specific questions posed, which should be submitted by 16 February 2024.

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