The recent news about the Metrobank theft brought me back to an old story that I wrote for Inquirer about bank signature cards. It dawned on me that if the bank internal control system for signature cards were stricter, perhaps, multimillion scams could be avoided – assuming of course that there is no conspiracy from within the bank.
In my opinion, signature cards should be entrusted to a custodian or one bank staff (per branch) who is trained to verify signatures.
If you visit some banks nowadays, you will notice that it is often also the teller who verifies the signature from the computer system. This method is a speedy solution but it loosens internal control.
There is no check and balance in this case. There should be another person who will approve the signature before the final transaction is completed. This offers an opportunity to spot inconsistencies in the transaction.
As a young banker for a major foreign bank in the Philippines, I was once sent for training on money laundering. During the session, I learned that syndicates recruit young people to do forgery and the copiers are often quite talented to the point that actual signature verification at the bank can be tricky. Thus, I had always assumed that bank personnel needed some formal lessons before undertaking signature verification.
Keep in mind that it is the signature cards that serve as the key to proceed or stop a transaction. Much of it boils down to a customer’s signature. Therefore, it is a critical point in a banking transaction. The question now is this - are there still banks who employ and train employees to become custodians for these signature cards?
For example, in the case of the alleged Metrobank theft, an extra step in signature verification from a third party could have stopped that transaction if the instruction letter was forged to begin with (as reported in the news).
Of course, another angle that is being investigated is whether there were other bank officials involved in the scam. If so, that would be a different story all together.
Bottom line is this. When a customer gives the bank his signature card, he is basically telling the bank to honor transactions based on his signature.
If the signature is the main instrument needed to proceed with a transaction, then it means that the bank is expected to guard them the way they would care for a person’s privacy.
Thus, signature cards should not be left in the open for everyone to see. Rather, the documents were meant be kept private and confidential, for the ultimate protection of the bank customer and his money.
