Digital banking fraud on rise

Digital banking fraud increased 20% year on year last year, but the counterfeiting of credit and debit cards showed significant declines.

Violent bank-related robbery of money or bank cards from clients while they were on their way to or from a bank branch or ATM decreased 2% compared to 2018.

The South African Banking Risk Information Centre (Sabric), which compiles statistics on behalf of the banking industry, said Limpopo, Mpumalanga and the Western Cape were showing the biggest decreases in these types of crimes, but they had increased 10% year on year in the Eastern Cape.

According to the centre’s latest report, the overall gross losses on card transactions due to criminal activity in SA was R428.6m last year, a 2% decrease from the previous year.

However, the banking centre reported an increase in business burglaries of 27% year on year, while business robberies shot up a staggering 86% last year.

And though the Eastern Cape showed a 7% decrease in bank robberies, from 45 to 42, these crimes in Limpopo rose 600%, from two incidents in 2018 to 14 last year.

According to the report, digital banking fraud increased 20%.

However, fraud losses on banking apps increased just 1%.

Despite a huge drive by banks to increase the number of transactions processed on apps, the total gross loss for last year was R106.3m.

There were no reports from any of the banks of a banking app being technically compromised to commit fraud.

The centre’s CEO, Nischal Mewalall, said though banks had sound security measures in place, criminals knew this.

“[Criminals] therefore resort to manipulative social engineering tactics to get bank customers to inadvertently share their personal and confidential information, allowing them access to transact on customer accounts without authority,” Mewalall said.

Digital credit card and debit card fraud increased 20.5% last year, with the leading contributor “card-not-present” fraud (when a card number is used fraudulently by someone to make a payment without the physical card), he said.

ATM attacks decreased 9% overall in the period under review, with the Eastern Cape showing a 14% decrease.

And though the Eastern Cape showed a 4% decrease in cash-in-transit robberies, these crimes were up 13% and 7% respectively in KwaZulu-Natal and the Free State.

The counterfeiting of SAissued credit cards decreased 44.8% year on year — and declined 34.8% for debit cards.

Mewalall said collaboration between the centre’s members and other stakeholders was critical in combating organised financial crime.

“Sabric is well positioned to do just that, by leveraging the collective efforts of its members and stakeholders.

“These results show what’s possible,” he said.