Australian Regulator Rebuffs Updates to ePayments Code

An Australian regulator said the country’s banking industry has not convinced it to let banks impose new security measures for customers using online banking.

The proposals, outlined in a report this week by the Australian Securities and Investment Commission (ASIC), had called for an update to the country’s ePayments Code to allow for biometrics, have the code apply to nationwide privacy rules, and have those rules apply to both digital and paper receipts.

ASIC said the ePayments Code is “a voluntary code of practice” that regulates electronic payments, including ATM transactions, online payments, credit/debit card transactions and internet and mobile banking.

The regulator said it has been reviewing the code to determine its continued effectiveness, “taking into account significant developments in financial technological innovation.”

ASIC said it will not go forward with the proposals from the banking industry, as it wants a better definition of biometrics, adding “further work is needed to ensure that the benefits of accommodating biometric authentication within the code are balanced appropriately against implications stemming from consumers’ use of such technology.”

The regulator said that instead of simply updating the ePayments Code to make room for biometrics, the banks asked for a too-broad modernization of the code.

The banks proposals to update the code included asking ASIC “to consider how consumers use their mobile phones and other electronic devices and, for example, how this affects the security of virtual credit and debit cards in the event that the consumer’s personal electronic device is compromised or lost.”

Consumers have become increasingly comfortable with digital authentication through mobile devices, especially biometrics such as finger scans and facial recognition linked to finance apps.

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According to “The Future of Authentication in Financial Services,” created in collaboration with Entersekt: “Consumers who access their digital financial accounts via multiple platforms are the most likely to use multiple biometric authentication methods to access their digital financial services accounts at least once a month,” with 36% of cross-platform consumers using fingerprint scans, 28% using facial scans and 18% using voice to access finances online.