BSP tells banks to clamp down on digital vote buying, selling

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has strongly called for the adoption of enhanced surveillance and monitoring measures to prevent the misuse of the financial system as a conduit for illegal activity during this year’s presidential and national elections.

BSP Deputy Governor Chuchi Fonacier said banks and financial institutions should re-assess their existing controls in detecting or preventing the possible massive influx of fraudulent accounts and transactions in view of the recent warnings from the Commission on Election and the Philippine National Police regarding the possibility of vote-buying or selling through digital means in relation to the upcoming elections.

To mitigate the heightened risk of the possible use or misuse of digital channels in vote buying or selling activities, Fonacier said BSP-supervised financial institutions (BSFIs) should institute necessary enhancements and remedial measures to ensure that appropriate customer onboarding processes and effective fraud management system (FMS) are in place.

Likewise, she said BSFIs should make sure that their current account and transaction monitoring capabilities are commensurate to respond against the fraudulent activities.

“At the minimum, BSFIs should consider the following possible scenarios in calibrating their FMS and account, and transaction monitoring rules or parameters,” Fonacier said.

Under Memorandum 2021 – 074, the BSP said BSFIs should concentrate a significant number of account registrations in the area or locality where there is rampant vote buying or selling and should be on the lookout for large cash transactions during election period.

Fonacier said banks and financial institutions should be vigilant against unusual transaction flows between accounts, including the velocity and frequency of transactions such as many-to-one and one-to-many schemes as well as unusual volume and value in cash in or cash out channels.

She said BSFIs should submit suspicious transaction reports (STR) to the Anti-Money Laundering Council (AMLC) after due investigation of complex, unusually large transactions, unusual patterns of transactions with no underlying legal or trade obligation, purpose or economic justification, or the amount involved is not commensurate with the business or financial profile of the client, and other transactions that may be considered suspicious.