Social Media Platforms Licensing Could Help Combat Online Financial Fraud - Analyst

By Anas Abu Hassan

KUALA LUMPUR, Sept 2 (Bernama) -- Regulatory framework or licensing of social media platforms could be used to combat and eliminate safe havens for online financial fraud perpetrators, an analyst said.

Universiti Teknologi Mara (UiTM) Faculty of Communication and Media Studies political and social media analyst, Assoc Prof Dr Sara Chinnasamy noted that licensing could benefit the authorities in terms of strengthening data collection and analysis to help detect and prevent financial crimes across different sectors and countries.

She said Malaysia needs to encourage greater reporting of financial crime as well as invest in capacity building and training for law enforcement to develop a more effective and truly global response.

"We need an initiative that gathers and collates information about the cybercriminal ecosystem and major threat actors operating so that Malaysians are aware of this.

"Licensing is a crucial step forward in safeguarding popular online platforms and users against evolving and increasingly sophisticated cyber threats," Sara told Bernama.

She highlighted that financial fraud is increasing worldwide as the public embraces new, sophisticated technologies that create openings for online criminals, hence, the need for regulation.

"While licensing is a way, information sharing across sectors and between countries is a key part of efforts to combat online financial crime.

"This will create opportunities for greater cooperation between the private sector and law enforcement to address cybercrime," Sara explained.

On July 27, the Malaysian Communications and Multimedia Commission (MCMC) announced that all social media and Internet messaging services with at least eight million registered users in Malaysia must apply for a Class Licence under the Communications and Multimedia Act 1998 (Act 588), starting January 1 next year.

Earlier this week, Communications Minister Fahmi Fadzil said the matter was agreed upon by Prime Minister Datuk Seri Anwar Ibrahim and Cabinet members to proceed with the implementation as scheduled.

UAE, Indonesia regulate social media platforms

Malaysia is not alone in implementing social media licences as countries like the United Arab Emirates (UAE) have also implemented similar measures, said Sara.

She said that the UAE has implemented new regulations mandating social media influencers and marketing companies to obtain licences for promoting products and services.

Indonesia, with a large social media user base, despite recent government restrictions on social commerce in the country, is showing a strong interest in entering the e-commerce arena, said Sara.

"Social media companies have not given up on e-commerce activities in Indonesia and analysts say social media platforms holding operating permits in Indonesia have the option to apply for both social commerce and e-commerce licences.

"This is possible, but it depends on each social media platform’s internal policies, considering which option is advantageous in terms of overall cost-benefit and risk appetite," she said.

-- BERNAMA