SA grappling with a surge in banking app fraud, Sabric reveals

South Africa is grappling with a surge in a formidable array of financial and banking crimes, with a spike in banking app fraud and explosive ATM attacks, the South African Banking Risk Information Centre (Sabric) has revealed.

In its annual crime statistics report for 2022, Sabric outlined the financial fraud and security challenges facing the banking industry, spanning contact crimes, digital offenses, application fraud, and card fraud.

The report was published on Tuesday.

Sabric said these criminal activities cast a long shadow over the nation’s economy, society, and governance. 

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Banking app

The report shows a surge of 36% in incidents of banking app fraud.

“Fraudsters employed a variety of tactics which included social engineering, exploiting data vulnerabilities, and stealing login credentials. One such nefarious tactic, which continues to prevail is “vishing” where scammers impersonate bank officials to trick victims into revealing sensitive data like one-time pins (OTPs) and random verification numbers (RVN’s).

“Phishing and vishing remained the preferred methods for illicitly gaining access to confidential banking information. Phishing emails led victims to counterfeit websites closely resembling legitimate bank websites, while vishing was employed to acquire OTPs and RVNs,” Sabric said.

ATM Attacks

Sabric said there has also been a spike in explosive ATM attacks.

“Despite the deployment of dye-stain technology, ATM explosive attacks surged by 23% in 2022, posing persistent challenges in the prevention of these high-risk criminal acts.”

Online Banking Fraud

“Financial losses per incident in online banking fraud soared in 2022, reflecting a 9% increase from the previous year. Phishing and vishing continued to be the preferred methods for illicitly gaining access to confidential banking data,” Sabric said.  

Mobile Banking

Sabric said the number of reported mobile banking fraud incidents saw a 9% reduction in 2022.

“SIM swap incidents in mobile banking fraud declined from 87% in 2021 to 76% in 2022  which suggests that this tactic is becoming less successful in achieving its aims.”

Fraudulent Vehicle Asset Finance Applications

There was a 17.6% reduction in fraudulent applications for vehicle asset finance (VAF) in 2022 which Sabric said was driven by the effectiveness of robust fraud detection systems implemented by banks.

Card Fraud

“Card fraud, encompassing debit and credit cards, saw an 18.4% decrease overall. However, card-not-present  (CNP) fraud, despite accounting for the largest portion of card fraud, displayed a decrease in incidents, with scammers resorting to “vishing” tactics to obtain OTPs.”

Sabric’s CEO Nischal Mewalall said the report paints a sense of urgency.

“Collaboration among government entities, the private sector, and civil society is paramount to effectively combating financial crime. The commitment of organisations like Sabric to bolster law enforcement capabilities, fortify regulatory frameworks, and promote transparency and accountability is unwavering,” Mewalall said.

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