News

Taiwan to require digital photos of account holders

October 20, 2003

TAIWAN - Beginning in January, domestic banks will be required to take digital snap-shots of new clients in a bid to prevent fraudulent savings accounts, which criminals can use to embezzle cash with forged ATM cards, according to a report in the Taipei Times.

Vice Minister of Finance Yang Tze-kaing, in a briefing to the legislature, said that the finance ministry has also asked banks to study the possibility of shutting down some ATMs in remote areas during specified time periods or limiting certain types of ATM transactions at night as a means of curbing criminal acts.

A Cabinet official who asked not to be named told the Taipei Times that ministry also considered a requirement to fingerprint depositors when they open a bank account. "They opted to delay the idea because it's bound to cause controversy and draw vehement opposition from human rights groups," the official said.

Kuo Yu-chyi, secretary-general of the Bankers' Association, said the digital-photo database will help provide the police with clues to investigations. The measure will be easy for banks to comply with since all it requires is a digital camera, he said.

But Kuo also expressed concern that bank customers who dislike the idea may not cooperate.

Speaking on the condition of anonymity, a banker at a foreign bank said the photo idea may be helpful although it will mainly prevent criminals with fake accounts from using those accounts.

"If there's difficulty in setting up a national fingerprint database, a snap-shot database isn't such a bad idea," she said.

However, she said more emphasis should be placed on risk management at ATMs rather than at account enrollment. She said that her bank's ATMs are equipped with specially-designed seals on the card scanners. The seals' codes are renewed on a daily basis, so that if any illegal access to the system occurs, the bank will find out by examining the seal's color and daily code.

Taiwan has also moved its deadline for full replacement of magnetic ATM cards with integrated circuit or chip-based cards forward from June 2005 to June 2004; magnetic cards will no longer be used after ATMs are upgrade to accept chip cards by the end of 2004.

"Financial institutions have to complete the construction of the image-filing system by the end of this year in preparation for the launch of the scheme in January next year," said Vice Minister of Finance Susan Chang. "With the implementation of the IC-card replacement plan, we believe bank frauds will largely dwindle because they're more difficult to forge than normal magnetic cards."

Yang confirmed that 257 depositors at 24 banks lost more than NT$30 million ($884,173 U.S.) within five days between Oct 10 and Oct 14 during a recent ATM card fraud. Members of a gang led by Soong Jen-chao were arrested in that incident, according to the Taipei Times.