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31 May 2019  (988 Views) 
Monetary Auth of Singapore

Irrational fear of exposing bank account number
Singaporeans have an irrational fear of exposing their bank account numbers. They fear that a crook may use that account number to access their account and take money from them. 

This fear is irrational for the following reasons:

a) The crook cannot access a bank account with this number. To access a bank account the crook needs to have the login ID, password and 2FA device. The login ID is not even the bank account number.

b) The bank account number has already been exposed on each cheque that they write to make a payment. This has been happening for decades. It has not lead to the risk that they feared.

c) The bank account number is freely exposed in many countries to allow people to make payments use bank transfers instead of cheques. A Spanish manager told me that he has never written a cheque in his entire life. He was surprised to see that cheques are the predominant form of payment used in Singapore. In Spain, payments are made by bank transfers. 

d) Some people published their bank account number in their appeal to receive donations. They do not seem to face any issue about their bank accounts being hacked.

This irrational thinking is not confined to the people. Even the authority, the Monetary Authority of Singapore, has this irrational fear. The banks do not expose the full bank account number of the other party in their bank statement. They only show a partial number. I suspect that they are probably following a directive from MAS.

Singapore has one of the highest rate of cheque payment in the world. This inefficient form of payment contributes to our high cost of doing business. 

What are the risks of exposing the bank account number? I cannot think of any risk. Can you?

If we publish the bank account number, we may receive some bank transfers without sufficient details about the purpose of the payment. But this risk already exists in the world of cheques. Some companies have received cheque payments without sufficient details.

Perhaps there is a risk that the payer may quote the wrong bank account number and the payment goes to the wrong account. This risk can be mitigated by showing the name of the holder, for verification, when the number is entered. Some people may worry about privacy, but I do not see any issue here. 

Perhaps the holder can register his (or her) account to receive payment and authorize the bank to reveal the name of the holder for the purpose of verification.

We need to remove the irrational fear and encourage people to receive payment by internet transfers, instead of cheques.

Tan Kin Lian

Vote - do you agree there is no risk in explosing the bank account number?


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