South African Businesses Face Challenges with Rising Financial Fraud: Insights from the 2023 LexisNexis® True Cost of Fraud™ Study – Europe, Middle East and Africa
Key Findings
- Financial fraud losses in South Africa have increased by 49% in the past year.
- Digital channels account for more fraud losses than physical channels for the first time.
- Fraud significantly impacts customer trust and conversion rates in South Africa.
Fraud in South Africa: Financial and Operational Impacts
According to a new study by LexisNexis® Risk Solutions, financial fraud in South Africa has risen by 49% in the past year 1. Fraud is no longer just a financial threat but also impacts operational efficiency, customer trust, and reputation. In South Africa, 93% of businesses have noticed its impact on customer conversion, compared to 71% across Europe, Middle East, and Africa (EMEA) 1.
Jason Lane-Sellers, director of fraud and identity, EMEA at LexisNexis Risk Solutions, stated, “Fraud is not just a financial threat but also has broader operational impacts and can harm customer trust.” 1
Digital Fraud: Cybercriminals and Synthetic Identities
Digital channels account for 52% of overall fraud losses in Europe, Middle East, and Africa, surpassing physical fraud for the first time 1. Cybercriminals exploit the anonymity of digital transactions to execute fast and untraceable fraud. The rise of synthetic identities is cited as the primary challenge in customer identity verification by 52% of businesses in the region 1.
Combating Fraud: The Role of AI, Machine Learning, Biometric, and Behavior-based Authentication
To counter the evolving tactics of cybercriminals, businesses need to adopt advanced fraud management and authentication solutions 1. Technologies such as AI, machine learning, biometric, and behavior-based authentication methods can help identify and prevent fraud throughout the customer journey 1.
Collaboration and Innovation to Create a More Secure Ecosystem
The 2023 LexisNexis® True Cost of Fraud™ Study – Europe, Middle East, and Africa emphasizes that fraud is a dynamic threat necessitating ongoing investment, innovation, and collaboration among industries and government agencies to create a more secure ecosystem for all 1.
Methodology
The True Cost of Fraud Study – Europe, Middle East, and Africa surveyed 1,845 global fraud management decision-makers at financial institutions and retail companies, including 55 in South Africa 1. Data collection and survey questions reference a 12-month period 1. For further information, visit LexisNexis Risk Solutions 1.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions includes seven brands covering multiple industries and sectors 2. Headquartered in metro Atlanta, Georgia, and part of RELX, a global provider of information-based analytics and decision tools for professional and business customers 2. For more details, visit LexisNexis Risk Solutions 2.
Media Contact
For more information, please contact Ade O’Connor on +44 7890 918 264 or [email protected] 3.