South Africa Grapples with Soaring Economic Crime Rates
A recent report by PwC reveals that South Africa remains a hotspot for economic crime, with the country’s incident rate averaging 27 percentage points higher than the global average since 2009. In 2020, South Africa tied with China for the highest reported incident rate of economic crime worldwide.
The Problem: High Awareness, Higher Losses
Despite high awareness of economic crime among South African businesses, total losses have increased by 4% between 2018 and 2020, exceeding $1.7 billion (25 billion South African Rand). Customer fraud has emerged as a new threat, with 47% of respondents experiencing it in the last 24 months.
Customer Fraud: A Growing Concern
For the first time, “customer fraud” was the most prominent type of economic crime listed in PwC’s report. This type of fraud is particularly concerning, as it involves deceiving customers into committing financial transactions that are not authorized or legitimate. Businesses must take proactive measures to prevent customer fraud, including:
- Implementing robust due diligence checks
- Using technology to verify identities
Outsourcing and Vendor Fraud
The trend towards outsourcing business functions has created new security threats. 46% of respondents cited vendors/suppliers, joint venture/alliance partners, or consultants/advisors as the perpetrator of their most disruptive economic crime incident in the last two years. Businesses must enhance due diligence measures to assess and manage risk when dealing with third-party contractors.
Distrust: The Invisible Cost of Economic Crime
Economic crime has a lasting impact on trust within communities and the economy as a whole. 1/3 of South Africans cited distrust as the most significant emotional impact of incidents of economic crime. This pervasive issue undermines investment, growth, and development. Rebuilding trust requires verifiable identities that can offer peace of mind by affirming the integrity of those we do business with.
Enhanced Due Diligence: A Key to Trust
Proper due diligence procedures are essential in preventing economic crime. However, 24% of respondents had no third-party due diligence or risk monitoring program. Businesses must prioritize enhanced due diligence measures, including:
- Know Your Customer (KYC) checks
- Identity verification services
By implementing advanced due diligence services, businesses can mitigate the risk of economic crime and restore trust within their communities.
A Trust-Based Solution
As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is at the forefront of a trust-based and privacy-compliant digital world. By partnering with ThisIsMe, businesses can:
- Enhance their due diligence procedures
- Verify identities securely and efficiently
- Build trust within their communities
Join the movement towards a more secure and trustworthy future. Contact ThisIsMe today to learn more about our world-class due diligence solutions.