Common Types of Financial Fraud in South Africa on the Rise

South Africans are being warned about a surge in SIM-swap fraud that has seen average victims losing R17,800 per incident. The South African Banking Risk Information Centre (Sabric) has released its annual statistics on financial and digital crimes impacting the banking sector.

Digital Banking Fraud Statistics

According to Sabric, despite an 18% decrease in digital banking fraud incidents from 2020 to 2021, there was a 45% increase in total gross losses in digital banking during the same period. Mobile banking fraud saw the biggest decline in incidents with a 47% drop.

Key Statistics

Digital banking products are far safer than in-person banking and enable people to transact from anywhere safely.
Social engineering tactics by criminals increased significantly.
SIM-swap fraud saw a jump of 63% from 2020 to 2021, with an average financial loss per incident rising by 44%.
Online banking fraud accounted for the second-highest portion of gross losses at 45%.

Social engineering techniques such as phishing, fishing, smishing, email hacking, and business email compromise continued to prevail in the digital banking fraud space. These methods are often used in combination or as one segment of a broader scheme.

Obtaining victims’ private information through social engineering tactics
Exploiting vulnerabilities in critical data management, sourcing usernames and passwords saved on various devices or multiple applications

SIM-Swap Fraud

The number of incidents involving SIM swaps increased from 2,686 in 2020 to 4,386 reported in 2021 - a jump of 63%. The average financial loss per incident went from R12,315 in 2020 to R17,775 reported in 2021, which is a rise of 44%.

SIM-Swap Modus Operandi

Interception of transactional verification tokens like one-time pins (OTPs) and random verification numbers (RVNs)
Tactical part of the modus operandi involves SIM swaps via unsuspecting bank clients’ mobile service providers

Online Banking Fraud

Although online banking fraud makes up the smallest portion of incidents of digital banking crime (20% of reported incidents), it accounts for the second highest portion of gross losses at 45%. In general, financial losses per incident decreased by 9% between 2020 and 2021.

Key Online Banking Fraud Statistics

Financial losses per incident decreased by 9% between 2020 and 2021
Online banking fraud accounted for the second-highest portion of gross losses at 45%

Physical Robberies

ATM attacks increased by 11% in 2021 with a 17% increase in losses. Incidents where explosives were used increased by 15%, whereas the number of angle grinder incidents decreased by 11%.

Key Physical Robbery Statistics

ATM attacks increased by 11% in 2021
Financial losses per incident increased by 17%

Vehicle and Asset Finance Fraud

Vehicle and asset finance fraud increased by 53% in 2021. With regards to home loans, only 12% of reported fraudulent mortgage loan applications were successful, while unsecured loans saw a 4.4% decrease from 2020 to 2021.

Key Vehicle and Asset Finance Fraud Statistics

Vehicle and asset finance fraud increased by 53%
Only 12% of reported fraudulent mortgage loan applications were successful

Combating Banking and Financial Crime

Sabric has made inroads in combating banking and financial crime in South Africa by training more than 900 SAPS and NPA personnel on banking products and related evidence, working closely with the DPCI to establish task teams across provinces.

Key Anti-Financial Crime Initiatives

Training of SAPS and NPA personnel on banking products and related evidence
Establishment of task teams across provinces by Sabric and the DPCI