Banks follow suit on beefing up SMSF account security
Following the ATO’s recent launch of its SMS alert service for SMSF trustees, major banks will also move to provide greater security checks for SMSF bank accounts when these are accessed or transacted on by a third party, according to Verante Financial Planning.
In a recent blog post, Verante director Liam Shorte said both banks and regulators were looking to implement tighter security measures around account access as the incidences of financial scams such as online fraud and identity theft increased.
“Everybody is getting worried about the quality of scams and fraudulent schemes out there at the moment, and the SMSF sector is just one of those being targeted,” Mr Shorte said.
“So, the ATO, your bank account and other deposit account service providers are stepping up their cross-checking of transactions with account holders.”
Mr Shorte said many banks were starting to issue similar text message alerts to SMSF trustees when their accounts were accessed by a third party.
“You may shortly start receiving SMS and other communications from your bank advising you of transactions on your accounts initiated by your accountant, financial planner or other third-party service providers under a client authority from you,” he said.
“Essentially, you will be notified of any debit by a third party, on an ongoing basis, unless you opt out.”
Mr Shorte added that the advanced security was the result of the recent ASIC Report 584 Improved protections for deposit accounts with third-party access, which found that banks could do more to manage risks to customers associated with third-party access to accounts.
He said that while SMSF trustees were able to opt out of the alert notices from banks, usually through their online banking app, it was important to their fiduciary obligations as a trustee that they continue to stay on top of who was accessing their SMSF’s bank account.
“As SMSF trustees, I would have to recommend you let the notifications come through for three to six months at least, as it is your duty as a trustee to take care of the SMSF assets,” Mr Shorte said.
