South Africa Faces Surge in Digital Banking Fraud

South Africa’s digital banking sector is facing a troubling trend, with a significant rise in cybercrime. According to the South African Banking Risk Information Centre (Sabric), fraud cases in digital banking have increased by a staggering 45% in 2023, with financial losses jumping by 47%.

This is indeed a wake-up call for all stakeholders.

The primary concern lies with banking apps, which now account for 60% of all digital banking crimes. The ease and convenience of digital platforms have unfortunately made them attractive targets for cybercriminals.

They employ techniques such as phishing, ransomware, and online fraud, and have even started using generative AI to enhance their malicious activities. This situation underscores the urgent need for both users and financial institutions to enhance their security measures.

Card Fraud Concerns

For those engaged in online shopping, “Card Not Present” fraud has become a major issue, representing 68% of all card fraud losses—a 19% increase from previous years.

However, there is a bright spot; counterfeit card fraud is decreasing due to improved authentication methods and the increasing use of contactless payments.

ATM Attacks

ATM attacks remain a significant concern, particularly in Gauteng, with 196 incidents involving explosives reported this year.

Yet, robberies at state-owned banks have decreased by 41%, a change attributed to the public increasingly opting for cards over cash during SASSA grant payments.

Other Fraudulent Activities

Application fraud is also on the rise, severely affecting vehicle asset finance and mortgage loans. Furthermore, unsecured fraud—where credit is obtained without collateral—has more than doubled, highlighting the growing sophistication of fraudsters.

In response to these alarming trends, Sabric stresses the need for a collaborative approach involving banks, law enforcement, and regulators to effectively combat financial crimes.

The call for enhanced security in the banking sector is critical to protect all financial stakeholders from evolving threats.

Stay vigilant and proactive in protecting your financial interests!