Electronic Banking Fraud in South Africa: Key Drivers in the Digital Age (ACCESS Access to science business innovation in digital economy)

Summary

• In 2017, the South African Reserve Bank issued operational licenses to 3 fully digital banks, escalating competitive dynamics across the sector.p.1
• Generative AI tools exploited by cybercriminals generated an estimated R3.3 billion in financial losses in South Africa during 2023.p.2
• Between 2022 and 2023, digital banking fraud in South Africa grew by 45%, with banking application fraud surging by approximately 89%.p.2
• Banking application fraud represented 60% of all reported digital banking fraud incidents in South Africa in 2023.p.2
• The study examined 5 banks, including 3 institutions holding Tier 1 capital in excess of US$3 billion, conducting interviews with 15 senior risk officers.p.6

Key insights

1. 100% of study participants noted the complete absence of integrated machine learning-powered frameworks for real-time fraud deterrence and detection.p.9
2. 67% of participants identified limited support from dedicated fraud units, including the absence of 24-hour customer care services, as a operational gap.p.15
3. 80% of risk officers confirmed that executive management adheres to documented policies and procedures during recruitment processes.p.13