19 Oct
Fewer South Africans are falling victim to fraud through digital banking platforms, but those getting scammed are losing a lot more than before.
Banking on digital platforms – including apps, online, and mobile – exceeds all other transaction channels in South Africa, according to the South African Banking Risk Information Centre (Sabric). And while the total number of reported digital fraud incidents in South Africa has decreased, as revealed by Sabric’s Annual Crime Stats 2021 report released earlier this week, some platforms are less secure than others, with losses surging.
Digital banking fraud incidents decreased by 18% overall in 2021. This decrease has been attributed to much safer mobile channels, with fraud incidents in this segment dropping by 47% from the year prior due to “enhanced detection measures implemented by banks.”
Banking applications, on the other hand, saw a 13% rise in reported fraud incidents. The average financial loss per incident also increased by 44% to R17,775, with Sabric attributing this rise “to the increased number of banking application users.” The opposite is true for online banking, where financial losses per incident dropped by 9% to R33,781 in 2021.
“Digital banking products are far safer than in-person banking and enable people to transact from anywhere safely,” said Sabric CEO Nischal Mewalall in noting the decrease in the overall number of reported incidents.
“But criminals have adjusted their social engineering tactics to leverage your data from social media and data leaks, making their efforts to manipulate customers difficult to spot.”
Concerted attacks by cybercriminals, although less in number, are costing victims much more. Gross losses to digital banking fraud in South Africa grew from R310,484,349 in 2020 to R438,238,743 in 2021, representing an increase of 45%.
Increasing incidents of fraud through banking applications account for the surge in gross financial losses.
“Although fraudsters obtained their victims’ private information through social engineering techniques, they also exploited vulnerabilities in the management of critical data, and sourced usernames and passwords saved on various devices or multiple applications,” noted Sabric.
Fraud impacting other channels of banking has mostly increased in both the number of incidents recorded and gross financial losses.
Branch-before-deposit incidents increased by 56%, with financial losses in the same category surging by 85%, while ATM attacks increased by 11%. Vehicle and asset finance fraud increased by 53% and card-not-present (CNP) fraud with a debit card grew by 31.5%.
19 Oct