The new feature will be rolled out mid-year to ANZ App, ANZ Plus, and internet banking customers.
It will allow customers to lock down their own accounts, block credit and debit cards, and notify the ANZ's fraud monitoring system of suspicious activity.
The technology is already being used in Singapore where banks were required to provide the so-called 'Kill Switch' feature two years ago.
ANZ's Digital Padlock is designed to give customers real-time control over the security of their own accounts as soon as they suspect they are being targeted by cybercriminals.
But applying the lock will not affect regular payments from their accounts, such as direct debits or home loan repayments.
After the threat has been averted, ANZ staff will restore their banking services.
ANZ group executive Retail Maile Carnegie said the product takes "just a few clicks" to lock down their accounts.
"It will provide some extra peace of mind for customers knowing they can act quickly if they think they are at risk of being compromised," she said.
Banks 'slow to respond' to scams
In a major report into anti-scam practices of banks, corporate regulator ASIC identified "gaps and inconsistencies" in the ability to detect and stop scam payments.
Its report into the four major banks, released in 2023, found the ability to hold payments in real-time depended on the payment channel involved.
A follow-up report in 2024 on the practices of 15 smaller banks found a significant number did not have payment hold capabilities.
The majority had not fully implemented monitor and payment-blocking capabilities across all their payment channels.
This means even if customers suspect they are being scammed and report it to their banks in real time, it may not be possible for the bank to stop the payments from their accounts.
Banks stepping up
In response to criticism from regulators, Australia's banking industry has agreed to step up its anti-scam measures.
Later this year, Australian banks will bring in 'Confirmation of Payee' technology, allowing customers to see whether the bank account details they've entered to make payments match with details held by the recipient's bank.
Name-matching isn't widespread across Australian banks but will be a major step in helping prevent invoice scams as well as accidental payments to wrong accounts.
The $100 million system is part of the banking industry's Scam Safe Accord which also includes a major expansion of intelligence sharing among banks.
In 2024, Australians lost $2.03 billion to scammers although this was a 26% decrease from the previous year.
The banking industry said it's also introduced more warnings and payment delays.
ANZ said it's done this to specific payment destinations identified as having a high scam or fraud risk, with the destinations constantly updating.
It's also introduced a tool which automatically turns off the ability of ANZ Plus customers to make payments to cryptocurrency exchanges, used in around half of all scams.
All crypto exchange payments on the platform are blocked unless customers choose to override it.
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