Several banking institutions are seeking more time to comply with the Bangko Sentral ng Pilipinas’ (BSP) mandate to implement sophisticated fraud management systems, even as the regulator warns of potential license suspensions for those that fall behind.

BSP General Counsel Roberto L. Figueroa said during the annual reception for the banking community that a "couple" of lenders have approached the central bank to request an extension of the current deadline.

While the BSP is internally discussing the merits of these appeals, Figueroa noted that the regulator is currently maintaining its original timeline. The industry’s overall readiness will be closely reviewed before any decision on a grace period is finalized.

He emphasized, however, that banks failing to comply while the majority meet the requirements will be subject to questioning.

Late last year, the BSP warned it could go as far as suspending their licenses, on top of holding them liable for losses their clients incur from fraud, should banks fail to comply with the central bank’s order.

BSP Deputy Governor Elmore O. Capule, head of the corporate services sector, said the central bank can impose fines, penalties, or even suspend licenses on banks that fail to comply with regulations.

If banks request the one-year deadline to be extended, Capule said the finality of the transitory period will be revisited by the BSP after a year. Banks are taking the directive “seriously,” given the massive costs involved in creating an FMS.

While one-time passwords (OTPs) can be part of an FMS, Capule stressed that BSP-supervised financial institutions (BSFIs) need more advanced measures, including multiple systems, to prevent fraud.

New features of FMS should trigger red flags, similar to credit card alerts, and can even block suspicious transactions.

It bears recalling that commercial or large banks were reported to be on track for full compliance, while it was the “smaller institutions” that requested the transitional provision.

Meanwhile, the BSP asserted that compliance costs are proportionate, with banks handling over ₱75 million in six months needing advanced systems, while smaller banks can use simpler fraud management tools.

FMS is a major component of the Anti-Financial Accounts Scamming Act (AFASA), which was passed in July 2024.

Figueroa confirmed that law enforcement agencies have already filed the first set of cases for violations of the AFASA.

As a relatively new piece of legislation, AFASA is being utilized alongside the Consumer Accounts Protection Office (CAPO) to investigate ongoing scams and provide direct assistance to victims of financial fraud.

AFASA has already been applied in high-profile coordination efforts, such as cases involving accused Department of Public Works and Highways (DPWH) employees, where funds were frozen during the inquiry process.