SABRIC Reports Significant Increase in Financial Crime Losses for 2023

Publication Date: 21/10/2024

The South African Banking Risk Information Centre (SABRIC) has released its Annual Crime Statistics Report for 2023, revealing a concerning rise in financial crime that has resulted in the loss of almost R3.3 billion. These crimes, which include digital fraud, card fraud, and contact crimes, continue to undermine economic growth in South Africa.

Cybercrime

Cybercrime has seen the most alarming increase, with digital banking fraud surging by 45% and related financial losses rising by 47%. Fraud on the banking app has become the dominant threat, accounting for 60% of all digital banking crimes, with a staggering 89% year-on-year increase. Criminals have also begun to exploit advanced technologies like generative AI to perpetrate sophisticated fraud schemes, including fake emails and deepfake content.

Card Fraud and Contact Crimes

Card fraud remains a major issue, particularly in online transactions. Card Not Present (CNP) fraud, which occurs during online purchases, made up 68% of gross fraud losses and saw an increase of 19% from the previous year. SABRIC is also concerned about the 85% rise in associated robbery incidents inside bank branches, which pose significant risks to both customers and bank staff. ATM attacks continue to affect the banking sector, especially in Gauteng, despite a slight 9% decrease in incidents. Here, criminals have even managed to remove stained cash despite dye-stain security measures being activated.

Application Fraud on the Rise

Application fraud which involves fraudulent financial product applications, has escalated dramatically. Notably, vehicle asset finance fraud saw more than a 100% increase in reported cases.

Regional Disparities in Financial Crime

The report also highlights significant regional disparities in financial crime rates:

  • Gauteng province has the worst crime statistics, showing higher crime rates across several categories of financial crime. Key reasons include its high concentration of economic activity, high population density, and the presence of well-organised criminal networks.
  • In contrast, the Northern Cape stands out as the province with the best crime statistics, with the lowest rates of financial crime across several categories. Factors contributing to this include its low population density and rural character.

Positive Trends Amidst the Challenges

Despite the concerning rise in certain types of financial crimes, there are some positive trends highlighted in the SABRIC 2023 Crime Statistics Report:

  1. There was a significant 48% reduction in counterfeit card fraud, which now accounts for just 2% of all card fraud incidents. This drop can be attributed to the increased use of security technologies like EMV chip cards, stronger authentication methods, and contactless payments.
  2. Robberies at state-owned banking institutions, such as the South African Post Office, decreased by 41%. This reduction was largely due to the shift from cash-based payments for SASSA grants to card-based payments, which made cash holdings at these institutions less attractive targets for criminals.
  3. SABRIC’s collaboration with member banks, law enforcement, and international partners continues to show progress. For example, arrests linked to inside-branch robbery incidents led to a sharp decline in such incidents by the end of 2023. This demonstrates that coordinated intelligence sharing and joint operations can effectively disrupt criminal networks.
  4. There was a 9% decrease in burglary incidents at bank branches in 2023. More notably, cash losses related to these burglaries dropped by 87%, signalling that enhanced security measures and improved response strategies have been successful in deterring these types of crimes.

Nischal Mewalall, CEO of SABRIC, commented on the report: “The rise in financial crime, particularly in the digital space, is a stark reminder of the evolving tactics of criminals. While we have made significant strides in reducing certain types of fraud, the increasing sophistication of cybercrime requires us to continuously innovate and strengthen our defences. Collaboration between banks, law enforcement, and regulatory bodies is more crucial than ever to safeguard our financial systems and protect our customers.”

Please click HERE to access the SABRIC Annual Crime Stats 2023 Report.

ENDS

For media inquiries and further information, please contact:

Louise van der Merwe

082 070 5349

media@sabric.co.za

About SABRIC

SABRIC, the South African Banking Risk Information Centre, is dedicated to safeguarding the South African banking sector by collecting, analysing, and disseminating information related to fraud risks. SABRIC collaborates with stakeholders to combat financial crime to protect the interests of our people.

www.sabric.co.za