Bradley Elliot
Digital and mobile-first banking has changed our lives for the better, but it has exposed us to a range of increasingly complex financial crime threats. According to South Africa’s Banking Risk Information Centre (SABRIC), 65.3% of 2024’s reported incidents were related to digital banking, with losses exceeding R1.4 billion.
Phishing scams, identity fraud and other forms of fraud can be devastating to their victims, draining them of their life savings, making it harder for them to get credit and introducing stress and emotional turmoil into their lives. In one recent example, an individual was scammed out R6 million by individuals posing as bank employees on a fake app claiming to use the funds to trade on the JSE,
Institutions and consumers are struggling to stay one step ahead of the criminals. In 2024, the Financial Services Conduct Authority (FSCA) issued more than 100 public warnings, highlighting sophisticated schemes such as impersonations, deepfake ads and finfluencer scams as growing threats. In instances where banks can be mimicked, this undermines trust between institutions and their clients.
These days, nearly anyone can become a victim if they let their guard down, even if they are financially sophisticated and digitally literate. Today’s scams use clever social engineering techniques and cutting-edge technology to fool their targets. Phishing emails and text messages can spoof legitimate financial institutions through cloned logos and slyly altered characters in reply-to addresses, websites and apps.
They often look and sound legitimate, even as they exploit urgency, fear and trust to get victims’ personal data or passwords. Deepfaked images and voices can mimic trustworthy individuals and bypass even advanced biometric identity verification checks. A phone call or email from a family member needing money for an emergency can seem real, even if fabricated.
Elsewhere, digital assets are becoming massively troubling for banks attempting to stop fake traders, or social media ‘finfluencers’ that champion cryptocurrency. South Africa is particularly affected by ill-used crypto; the huge Mirror Trading International (MTI) pyramid scheme defrauded investors out of over R8 billion.
The key role of banks and AML processes
The vast problem with fraud and scams raises the question of the role of financial institutions in addressing the challenge. Today’s fraud and scams demand a united response that goes beyond any single institution or system. Financial institutions, from large banks to fintech startups, need to collaborate more closely with each other and with other players like telcos and regulators.
Ecosystem-wide sharing of intelligence, alignment on real-time data standards, and collective processes to stop scams before they spread can help the financial system to keep pace with the speed and sophistication of criminal innovation. Only through active, transparent collaboration can the financial sector build public trust and reduce the impact of future fraud threats.
Banks can also inspire confidence by educating the public about how to protect themselves and reassuring customers that reports of fraud and attempted fraud will be taken seriously and treated confidentially. People may be embarrassed to have been tricked or not know what to report, or who to. It’s unsurprising that South Africa’s reporting of incidents decreased to 65.1% in 2024/25.
In one study, even after 74% of scams were reported, another 57% noted no callbacks or actions being taken. That does not instil much hope that institutions are taking scams seriously and undermines credibility. Instead, transparently showing the impact of reporting crime through aggregated trends or stats also builds vital awareness, fostering the idea that reporting is worth doing to lead to change.
Trust from two sides
As for consumers, SABRIC outlines ways South African customers can stay abreast of criminal’s current scamming tactics:
- Be suspicious of anywhere requesting confidential information (ID photos, logins or PIN numbers) that legitimate banks would never ask for.
- Hang up if the call is unsolicited and urges you to take action. Call your bank’s official number directly to check.
- Remember any investment opportunities guaranteeing returns is likely suspicious.
- Never download banking links through WhatsApp, Telegram, SMS, or email and use official app stores.
Personal finance demands vigilance from consumers and institutions alike. Protecting South Africans from evolving scams requires more than reactive measures, it demands continuous investment in AML innovation, clear public education and a culture of accountability where reporting is both encouraged and acted upon.
About RelyComply
RelyComply empowers banks, insurers, financial services providers, and innovative fintechs with a single, fully integrated KYC and AML platform. Designed for seamless implementation and rapid deployment, our intelligent technology enhances efficiency while detecting financial crime, enabling you to reduce risk and costs, ensure compliance, and drive strategic growth.
Bradley Elliott, CEO of Anti-Money Laundering (AML) platform RelyComply. He writes in his personal capacity.
