B

ank Indonesia is assessing the possibility of regulating Internet banking transactions to protect
customers from losses through cybercrime, a central bank official said Monday.

“We are still evaluating the necessity of making the regulation, or otherwise we can just push banks to tighten security through the Indonesian association of payment systems,” Aribowo, the head of BI’s payment system development and policy division, said.

He added that there were around 500,000 Internet banking transactions a day, growing by up to 15 percent so far this year, keeping pace with the growth in electronic banking, the fastest growing payment system.

The central bank said it wanted banks to upgrade their security system for Internet banking transactions, which could result in greater trust from the public to conduct transactions via the Internet — a move that is expected to further lead to a cashless society. “It would help us reduce the amount of money printed,” Aribowo said.

In comparison, there are between 2 million and 3 million electronic banking transactions through debit and credit cards per day, with a total transaction value of up to Rp 3 trillion. Meanwhile, there are an average of 370,000 manual clearing transactions a day with a total value of up to Rp 4 trillion per day.

University of Indonesia lecturer Brian Amy Prastyo said that if no measures were taken to secure Internet banking transactions, public trust in Internet banking in Indonesia would slide, resulting in merchants rejecting transactions.

“It could further affect the country’s economy and image,” he said, citing a central bank bulletin.

Brian explained that the least that banks could do to protect customers conducting Internet banking transactions was to apply two-factor authentication, or a security token, which is used in addition to a password to prove that the customer was who they claimed to be.

BI said some banks had begun to apply the security token feature, which acts as an electronic key for customers to access their accounts, although some banks had not adopted the measure. “So threats have actually been somewhat reduced,” Aribowo said.

A string of phishing scams hit headline recently, with fraudsters setting up fake web sites identical to banks’ online portals. Customers would log in with their user name and password, giving scammers control over customer accounts.

Despite admitting that online was prevalent, the central bank said it believed the number of incidents had decreased.