Financial firms must strengthen safeguards against scams, fraud

By Justine Irish D. Tabile, Senior Reporter

PHILIPPINE FINANCIAL institutions must strengthen their safeguards against consumer risks like fraud and cyberattacks as the rapid digitalization of the industry heightens its exposure to threats, FinTech Alliance PH said.

Citing the Organisation for Economic Co-operation and Development (OECD) Finance Risk Monitor 2026, FinTech Alliance PH Chair Angelito “Lito” M. Villanueva said that “as financial services migrate online, fraud and scams scale with equal speed and sophistication.”

“With 85% of 60 countries identifying financial fraud as a predominant consumer risk, the message is clear: digital transformation without digital trust is unsustainable,” he said in a Viber message.

“For the Philippines, the risks are compounded by cyberattacks and persistent financial exclusion,” said Mr. Villanueva. “We are rapidly expanding digital access, but inclusion must be matched with protection, as trust is the foundation of the digital economy.”

The OECD said in the report released this week that financial scams and frauds were the predominant concern across all income levels, with over 50 jurisdictions expecting these to increase over 2026.

However, the other most significant operating-environment risks differ for low- and middle-income and high-income jurisdictions.

In particular, high-income economies expressed concern about financial market volatility, risks associated with new business models, and sociopolitical instability as other key risks faced by financial consumers.

On the other hand, low- and middle-income economies cited inflation and interest rates, cyberattacks, limited financial infrastructure, and natural disasters as other top risks.

The report showed that the Philippines was among the countries that identified cyberattacks and financial exclusion as the most significant risks that financial consumers face.

“As financial services rapidly digitize, consumers face rising exposure to phishing, impersonation schemes, artificial intelligence-enabled deepfakes, and other sophisticated forms of cyber-enabled fraud,” said Ronald B. Gustilo, a national campaigner for the Digital Pinoys organization.

“The Philippines likewise flagged cyberattacks and financial as key risks, reflecting the dual challenge of protecting users while expanding digital access,” he added.

FINANCIAL LITERACY
The OECD report also identified the demand-side risks for consumers in 2025. The majority or 81% of jurisdictions see low levels of financial literacy as the most significant demand-side risk to financial consumers last year, followed by high levels of debt (63%) and low levels of digital capability (44%).

“Many jurisdictions such as the Philippines, Poland, and Romania outlined how low financial literacy directly affects consumers’ abilities to make sound financial decisions,” it said.

“Consumers may struggle to have a clear understanding of the terms, including the risks, of the financial products and services they use,” it added.

The OECD said that the low levels of financial literacy contribute to consumer vulnerability as they may be more misled or exposed to harm.

In the Philippines, many consumers are struggling to interpret financial terms or assess risks, which heightens their exposure to scams, debt traps, and financial decisions, it added.

To address these challenges, FinTech Alliance PH’s Mr. Villanueva said their organization is set to launch the industry-led Fraud Intelligence Data Sharing Network, which is meant to strengthen the enforcement of the Anti-Financial Account Scamming Act.

It is seen to help combat the proliferation of mule accounts and close anti-money laundering vulnerabilities by operationalizing collaboration.

“Fraud must be fought collectively, as it is no longer a single institution issue but an organized, cross-platform threat,” he said.

FinTech Alliance PH is also set to formalize its collaboration with the Cybercrime Investigation and Coordinating Center to deepen public-private coordination in cyberthreat intelligence, investigation support, and rapid response protocols.

“Lastly, we must modernize digital safeguards, from enhanced electronic ‘Know Your Customer’ and digital ID integration to stronger cybersecurity infrastructure, while embedding consumer protection at the core,” he said.

“Financial literacy must now evolve into digital financial resilience. The objective is not to slow innovation but to secure it.”

Digital Pinoys’ Mr. Gustilo said the challenges faced by Filipino finance consumers “require stronger market conduct supervision and faster enforcement against unlicensed and fraudulent operators.”

“At the same time, large-scale digital financial literacy efforts are critical so consumers can identify and avoid scams. Digital transformation must be paired with equally strong consumer protection safeguards to ensure innovation does not come at the expense of public trust.”