Digital and mobile-first banking has changed our lives for the better. However, it has exposed consumers and institutions to increasingly complex financial crime threats. Digital banking fraud now represents one of the fastest-growing risk categories in South Africa.
According to South Africa’s Banking Risk Information Centre (SABRIC), 65.3% of reported incidents in 2024 related to digital banking, with losses exceeding R1.4 billion.
Phishing scams, identity fraud and other forms of fraud can devastate victims. These crimes drain life savings, make it harder to obtain credit, and introduce stress and emotional turmoil. In one recent example, scammers posing as bank employees defrauded an individual of R6 million. They used a fake app and claimed they would trade the funds on the JSE.
Staying one step ahead of criminals
Institutions and consumers struggle to stay one step ahead of criminals. Digital banking fraud continues to evolve in sophistication and scale. In 2024, the Financial Services Conduct Authority (FSCA) issued more than 100 public warnings. These warnings highlighted impersonations, deepfake ads and ‘finfluencer’ scams as growing threats. When criminals successfully mimic banks, they undermine trust between institutions and their clients.
Today, nearly anyone can become a victim if they let their guard down. This risk applies even to financially sophisticated and digitally literate individuals. Scammers use advanced social engineering techniques and cutting-edge technology to deceive targets. Phishing emails and text messages spoof legitimate institutions through cloned logos and subtly altered reply-to addresses, websites and apps.
These scams often look and sound legitimate. They exploit urgency, fear and trust to obtain personal data or passwords. Deepfaked images and voices can mimic trusted individuals and bypass advanced biometric identity verification checks. A phone call or email from a family member requesting emergency funds can appear real, even when fabricated.
Elsewhere, digital assets have become increasingly troubling for banks attempting to stop fake traders and social media finfluencers promoting cryptocurrency schemes. South Africa remains particularly affected by crypto-related misconduct. The Mirror Trading International (MTI) pyramid scheme defrauded investors of more than R8 billion.
The key role of banks and AML processes
The scale of fraud and scams raises critical questions about the role of financial institutions. Digital banking fraud demands a coordinated response that goes beyond any single institution or system. Financial institutions, from large banks to fintech startups, must collaborate more closely with telcos, regulators and other stakeholders.
Ecosystem-wide intelligence sharing, alignment on real-time data standards and collective processes to stop scams before they spread can help the financial system keep pace with criminal innovation. Only through active and transparent collaboration can the sector build public trust and reduce the impact of future fraud threats.
Banks can also build confidence by educating the public on protective measures. They should reassure customers that they will treat reports of fraud and attempted fraud seriously and confidentially. People may feel embarrassed or unsure about what to report or whom to contact. This uncertainty likely contributed to the decline in reported incidents to 65.1% in 2024/25.
Trust from two sides
In one study, even after 74% of scams were reported, 57% of respondents noted no callbacks or actions taken. This inaction undermines credibility and discourages reporting. Instead, institutions should transparently show the impact of reporting through aggregated trends and statistics. This transparency builds awareness and reinforces the value of reporting. Consumers also play a critical role.
SABRIC outlines several ways South African customers can stay informed about evolving scam tactics:
- Be suspicious of any request for confidential information, such as ID photos, logins or PIN numbers, that legitimate banks would never request.
- Hang up if a call is unsolicited and urges immediate action. Call your bank’s official number directly to verify.
Remember that any investment opportunity guaranteeing returns is likely suspicious.- Never download banking links via WhatsApp, Telegram, SMS or email. Use official app stores instead.
Remember that any investment opportunity guaranteeing returns is likely suspicious.Personal finance requires vigilance from both consumers and institutions. Protecting South Africans from evolving scams requires more than reactive measures. It requires continuous investment in AML innovation, clear public education and a culture of accountability. In such a culture, institutions encourage reporting and act on it decisively.
Bradley Elliott | CEO | RelyComply | mail me |
