Digital banking, BNPL: Convenience comes with risks

Digital banking, online loans, and Buy Now, Pay Later (BNPL) services have become increasingly popular among consumers, particularly the younger generation, due to their convenience. However, this convenience may also expose users to financial crimes and the risk of mounting debt if stronger safeguards are not put in place. Malaysian Humanitarian Organisation secretary-general Datuk Hishamuddin Hashim raised concerns over the ease of opening bank accounts online, which could be exploited by scam syndicates to lure users into becoming account mules, especially among students at institutions of higher learning.

Similarly, Hishamuddin cautioned about the risks associated with online loan and credit card applications, urging banks to provide proper explanations, counselling, or advice to ensure consumers understand their financial capacity and commitments before taking up credit facilities. Hishamuddin also expressed concern over the growing popularity of BNPL services, which could encourage consumers to spend beyond their means, leading to an accumulation of monthly commitments and potential default.

Meanwhile, Malaysian Cyber Consumers Association (MCCA) president Siraj Jalil highlighted the growing security concerns surrounding digital banking, emphasizing the need for stronger safeguards to protect consumers from potential financial crimes.

Brief written by urgent.news from New Straits Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.