It is proposed to provide guarantors for citizens’ banking transactions

A bill that proposes to oblige all systemically important credit institutions (SICs) to transfer client funds only when the transaction is confirmed by the client’s authorized representative has been submitted to the State Duma. This service is designed to combat social engineering and was initially recommended by the Central Bank for citizens with disabilities. It is proposed to extend it to all clients, but only in relation to transfers using account details (without SBP, transfers by cards, etc.), so experts believe that in its current form it is unlikely to work effectively.

A bill has been submitted to the State Duma, according to which all SZKOs must provide clients with the opportunity to choose a trusted person who will confirm their transfers. The fiduciary must be a client of the same organization as the principal. He is given 12 hours to confirm or reject the operation; if he does not respond, the operation is considered unconfirmed and is rejected.

As noted in the explanatory note to the bill, it was developed to prevent fraudulent activities by using an additional verification mechanism. “According to the Bank of Russia, over the past three years there has been an increase in the volume of transactions without the consent of clients: in 2022, attackers stole about 14 billion rubles, which is 4% higher than the level of 2021,” the document says.

However, the bill states that such verification will not apply in the case of transactions through the fast payment system (FPS), with cards and electronic wallets. That is, the bill will only affect transfers using account details. As Anatoly Aksakov, head of the Duma’s financial committee, told Kommersant, it is necessary to work out mechanisms by which this additional verification mechanism can be extended to transfers through SBP and cards. “We will finalize the law to close all loopholes,” he said.

The explanatory note notes that back in 2021, the Central Bank developed methodological recommendations to prevent financial losses and reduce the risk of fraudulent transactions through a proxy, but only for consumers from among people with disabilities and other low-mobility groups.

The Bank of Russia told Kommersant that while a person is performing ordinary everyday transactions, the system does not manifest itself in any way, but if the bank suspects that a person is transferring his money under the influence of a fraudster, the system informs the assistant about this. They explained that the assistant can either confirm the transfer or purchase or reject such an operation, and if necessary, contact the ward and clarify for what purpose the transfer is being made. At the same time, the regulator notes, the assistant does not have access to his ward’s money and cannot make a transfer in his place.

Sberbank told Kommersant that the service for verifying transfers of loved ones has been operating at the bank since 2021. “Using the service, you can check transfers to Sberbank clients by phone, account, and card numbers; to a client of another bank – by account and telephone numbers, except for SBP,” the bank said, without specifying how popular this service is among its clients.

Experts consider the idea generally quite useful, although the 12-hour delay makes it difficult to implement in the case of SBP and card transactions, and these services account for the bulk of citizen transfers. “The fact that there are exceptions in the bill is most likely done as part of the first stage of implementing such a service,” says Roman Prokhorov, head of the board of the Financial Innovations association. In turn, the head of the Association of Participants in the Electronic Money and Money Transfer Market, Viktor Dostov, noting that the idea with a trusted person as a whole looks reasonable, believes that in this form it is too narrow to work. Vice-President of the Association of Banks of Russia Alexey Voylukov notes that in its current form this law will not radically solve the problem, since the operations that it plans to protect with the help of a trusted person, according to Central Bank statistics, account for only 28% of thefts.

If we talk about extending this mechanism to transfers by cards and through SBP, then, according to him, there is a serious technical issue. “Transfers through SBP are instantaneous, and they cannot be postponed for 12 hours; in fact, with cards, too, that is, such a transfer can only be delayed until the bank transmits it to the system,” explained Alexey Voylukov.

Maxim Builov