Alarming spike in digital banking fraud and ATM bombings in South Africa

The South African Banking Risk Information Centre (Sabric) annual crime statistics report reveals that the country is facing an epidemic of ATM bombings and digital banking fraud.

“South Africa is grappling with a formidable array of financial and banking crimes spanning contact crimes, digital offences, application fraud, and card fraud,” the organisation stated.

“These criminal activities cast a long shadow over the nation’s economy, society, and governance.”

In addition to alarming increases in digital banking fraud and ATM bombings, Sabric also reported positive developments in card fraud, fraudulent SIM swaps, mobile banking fraud, and fraudulent car loan applications.

“The Sabric annual crime statistics report for 2022 sheds light on the multifaceted landscape of financial fraud as well as security challenges in the banking industry,” it said.

Sabric said the key findings from the report underscored the complexity of the situation. It summarised them as follows:

  • Explosive Surge in ATM Attacks: Despite the deployment of dye-stain technology, ATM explosive attacks surged by 23% in 2022.
  • Alarming rise in digital banking fraud: South Africa witnessed an alarming 36% surge in reported incidents of online banking fraud in 2022. Fraudsters deployed a range of tactics, including social engineering and “vishing” scams to deceive victims into divulging sensitive information.
  • Escalating losses in 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.
  • Decrease in branch before-deposit robberies: A notable 39% decrease in branch before-deposit robbery incidents in 2022 can be attributed to the successful arrest of main suspects in specific regions.
  • Progress in mobile banking fraud reduction: Encouragingly, the number of reported mobile banking fraud incidents saw a 9% reduction in 2022.
  • SIM swap fraud decline: Additionally, incidents involving SIM swaps declined from 87% in 2021 to 76% in 2022, indicating a waning efficacy of this fraudulent tactic.
  • Decline in fraudulent vehicle asset finance applications: A commendable 17.6% reduction in fraudulent applications for vehicle asset finance (VAF) in 2022 was driven by the effectiveness of robust fraud detection systems implemented by banks.
  • Card fraud decrease with persistent challenges: Card fraud, encompassing debit and credit cards, saw an 18.4% decrease overall. Card-not-present 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 CEO Nischal Mewalall said collaboration among government entities, the private sector, and civil society was paramount to effectively combat financial crime.

“The commitment of organisations like SABRIC to bolster law enforcement capabilities, fortify regulatory frameworks, and promote transparency and accountability is unwavering.”

Nischal Mewallal, Sabric CEO

Now read: South African insurance clients hit in massive global cyberattack

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Alarming spike in digital banking fraud and ATM bombings in South Africa