What does a bank's 'kill switch' kill?

Services cut off under safety feature aren't standardised across banks, particularly when it comes to Giro

- Irene Tham

In October, a customer called a bank to freeze all his cards and savings, only to discover later that not all fund transfers were disabled.

It could well be that the customer expected the bank's "kill switch" to be a master switch in turning off the funding tap for everything linked to it further downstream – and reasonably so.

But a day later, the customer's compromised Wise multi-currency e-wallet could still be topped up with his linked POSB account. An unauthorised transfer of a total of $3,000 eventually went to an unknown overseas account through Wise.

The customer had no clue the transactions took place until it was too late.

He was a victim of an elaborate hack that involved a criminal abusing stolen login credentials to control his e-SIM, including one-time passwords, and online financial accounts. It did not help that the victim used the same login credentials across multiple online accounts, easing the hacker's access to these accounts.

The incident has thrown a spotlight on what the banking kill switch actually does.

How did the victim still lose money even though he had frozen his cards and savings?

Since October 2022, all retail banks here have rolled out their versions of the mandatory kill switch to let customers freeze all cards and accounts if they suspect their login credentials have been compromised.

The kill switch – which can be turned on by calling a bank hotline, or via the bank's app or website – is meant to limit potential losses to hackers, after some 790 OCBC Bank customers were swindled of $13.7 million in phishing attacks in December 2021 and January 2022.

But there is one big problem.

Depending on which bank you speak to, the kill switch has a different function.

Banks are divided into two camps over which services their kill switches affect, particularly when it involves Giro, a direct debit mechanism first set up in 1984 for people to pay bills.