South African digital banking platforms experienced a surge in fraudulent activities in 2022, with banking applications and online banking being the primary targets, according to the South African Banking Risk Information (Sabric) Annual Crime Stats.
Reported incidents of digital banking fraud rose by 24% in 2022, with gross losses escalating by a staggering 68% from R440 million in 2021 to R740.8 million in 2022.
Cybercriminals employed a plethora of social engineering techniques, including spear phishing (a type of phishing campaign that targets a specific person or group and often includes information known to be of interest to the target, such as current events or financial documents), vishing (the fraudulent practice of making phone calls or leaving voice messages purporting to be from reputable companies in order to induce individuals to reveal personal information, such as bank details and credit card numbers) and pretexting to exploit unsuspecting users.
Banking application fraud saw a significant 36% increase in incidents, with associated losses rising by 68%.
This segment accounted for nearly half of all digital banking crimes.
A concerning trend emerged with the rise in kidnappings or hijackings to force victims into transferring money via their banking apps.
Online Banking
Online banking fraud, while accounting for only 26% of digital banking crime incidents, resulted in a significant 47% of gross losses.
The average financial loss per incident rose by 9%, from R33,760 in 2021 to R36,824 in 2022.
Phishing and vishing remained the primary tactics used by fraudsters to deceive victims into revealing their banking details.
Mobile Banking
Mobile banking fraud incidents saw a 9% decline from 2021 to 2022. Despite being the second-largest segment in terms of reported incidents, it accounted for the lowest proportion of gross losses, thanks to enhanced detection measures by banks.
Smishing - which practice of sending text messages purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords or credit card numbers, remained the dominant method for mobile banking fraud, with SIM swap incidents, once a major tactic, seeing a decline from 87% in 2021 to 76% in 2022.
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