The South African Banking Risk Information Centre (Sabric) reported a spike in fraud incidents in 2018, with almost 23,500 cases across banking apps, online banking and mobile banking amounting to about R262.8 million in gross losses.
Historically, the vast majority of complaints received by the Ombudsman for Banking Services were the result of ATM issues.
In recent years, however, online-related complaints were the main headache – with phishing the major underlying cause.
While financial services firms are working around the clock to improve security, fraudsters are continuously devising new plans to circumvent the latest safety measures.
An example of this has been the shift from phishing to vishing.
With phishing, fraudsters impersonate a bank via email and entice the customer to click on links that redirect them to a fraudulent banking site, duping them into sharing their details and robbing them.
With vishing, fraudsters call the customer claiming to be from their bank and ask for account and login details to urgently “stop” a fictitious transaction.
Phishing and vishing are examples of social engineering – the act of manipulating customers into sharing their personal information.
Worryingly, studies suggest that the majority of customers struggle to differentiate between a phishing email and a legitimate email.
According to a recent Global Banking Fraud Survey, social engineering is one of the most significant challenges financial institutions in Europe, the Middle East and Africa face (as it relates to fraud risk).
Since fraud is constantly evolving, it is not possible to provide hard and fast rules as a guarantee against fraud. Yet, there are steps customers can take to protect themselves:
Cowyk Fox is the managing executive for Everyday Banking at Absa Retail and Business Bank
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