Remote banking vs remote access scams

Consumers and businesses are urged to beware of new remote access scams while the use of digital services continues.

Public sector organisations handle a massive amount of customer transactions every day. Some of these institutions, like public schools, can involve relatively small amounts of money, while larger organisations like municipalities, public hospitals and licensing departments can do thousands of transactions, worth hundreds of thousands of rands daily.

When a large portion of those transactions are paid in cash, the risks to both the institutions concerned and the customers they serve can be significant.

Sipho Silinda, CEO of Public Sector Banking, explained while the demise of cheques in South Africa at the end of 2020 resulted in a steady increase in the use of digital payment channels by most private sector businesses, some businesses have not seen a decline in cash transactions across much of the public sector.

He said this is not only a cause for concern, but it also means many public sector institutions are missing out on excellent risk management and savings opportunities.

“Apart from the obvious risks of having a lot of cash on your premises, cash handling is an expensive process, especially when having to secure and manage large sums,” Silinda said.

“Excessive cash management expenses can significantly increase an organisation’s cost of doing business.”

Anrie Spangenberg, the provincial head of FNB Commercial Public Sector Banking, said the cost of cash management does not only apply to the staff and security needed to do cash transactions and protect the money once it is collected from the customers but also when transporting that cash to the bank every day.

“Transporting cash is fraught with dangers, not least the growing incidence of cash-in-transit heists taking place across the country,” she explained.

“These specialist transport companies have to invest more money into increasing their own security; those costs are passed on to their customers.

“When you add bank handling and cash deposit fees to this equation, it becomes clear that accepting cash is simply not a financially prudent way of doing business anymore, especially for public sector institutions that need to maximise their revenues to maintain the levels of service expected of them,” said Spangenberg.

She said it’s not just risks and costs that make cash an unappealing payment choice, there are also the challenges associated with keeping track of payments made in cash.

“Organisations and customers need to have a record of all payments they make or receive, and a cash payment adds significant administration and risk to this record-keeping requirement.

“With complex capturing, filing, allocating and reconciling processes not only adding to the administrative burden but also increasing the potential for human error along the way.”

Given this extensive array of risks and challenges for all parties involved in even a small, basic cash transaction, Silinda said the case for any public sector institution to create a digital payments ecosystem becomes compelling.

“Not only do digital channels carry little, if any cost for both the organisation and its customers, but they make record-keeping easy and efficient for all parties involved,” he explained.

“More efficient payment systems create a solid platform for better service delivery and a positive customer experience.”

He emphasised the benefits of reducing cash transactions are not limited to large public sector organisations that do thousands of transactions a day.

“Irrespective of the type or size of the public sector institution, reducing the amount of cash-based day-to-day transactions makes a lot of sense,” he said.

“So even a small rural school can unlock value for itself by adding digital payment options, and at the same time, it will be lowering the risk exposure of its parent body, and the learners who are often the ones carrying the cash with them to school.”

Spangenberg said it’s not only important for public sector institutions to understand and embrace these benefits of moving from cash-based to digital transactions, they also need to help educate their customers about the benefits that digital payments offer them.

“Beyond merely digitising their own transactional processes, institutions have a responsibility to educate their customers about the risks of carrying, and paying with, cash,”

“At the same time inform them about the many benefits of choosing to do their transactions and payments on the many digital banking channels available to them.”

There’s a vast range of these convenient and secure digital payment channels, ranging from banking apps or online and cellphone banking to cash-accepting ATMs and even contactless and cashless tap-to-pay card or mobile phone payments.

“Alternatively, one of the easiest ways to pay is still using a monthly debit order, which can be set up quickly and easily, and automates the payment process so there’s no risk of forgetting to pay and ending up with an overdue account.

“In the end, digital payments aren’t only safer, but more convenient and more secure than cash transactions.”

Giuseppe Virgillito, head of digital banking at FNB, said though people move to online systems, cybercriminals also introduce new opportunistic scams.

“IT geniuses trick victims into relinquishing control of their devices to steal money or sensitive information.”
Virgillito said remote-access software has become a popular way for fraudsters to attempt to defraud consumers and businesses.

Virgillito shared some key safety tips that consumers should practice to protect themselves.

“Beware of strange calls, never share your OTP, never approve smart-in-contact requests for transactions you did not initiate, keep your information private, never disclose sensitive information, such as your username, password, card, and PIN details to anyone – not even a bank official.”