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Digital banking – Rise of fraud increases year on year

The SITEisfaction® report is an annual measure of customer satisfaction with digital banking services in South Africa. This year the consumer data indicates that Capitec and FNB are tied for first place as South Africa’s Best Digital Bank with a score of 79 each. These two banks have consistently been rated either 1st or 2nd since the measure was introduced in 2012.

According to Henk Pretorius, Managing Partner of Columinate | InSites Consulting, the results show there is more than one way to win the battle for the best digital experience. “Looking at our tied winners this year, it’s evident that FNB can learn something about simplicity from Capitec, and Capitec can learn something about identifying, adopting, and rolling out the appropriate technologies for its customers from FNB. FNB’s focus on technology and Capitec’s focus on simplicity has served both banks well, but it may be time to broaden that focus if they hope to remain competitive in the coming years, especially with the introduction of new, simple, tech-savvy banking brands”, he mentioned.

The rise of fraud is yet again an alarming factor. In 2018 it was reported that fraud was at an all-time high, rising significantly from the 2017 data. Unfortunately, the trend continues, with 69% of users reporting to have been targeted by fraudsters (up from 62% in 2018, and 46% in 2017), and one out of every three users (33%) falling victim to fraud (up from 22% in 2018, and 19% in 2017). 2019 marks both the highest number of targeted users and the highest number of victims since the report’s inception in 2012.

The most prevalent fraud of 2019

  • The “You are a winner!” pay-to-play scam, with more than two-thirds of the South African Internet Banking population being aware of it.
  • 36% reported being targeted by it, and 10% of users succumbing to it, up from 8% of victims in 2018.

The “You are a winner” pay-to-play scam involves alerting the targeted user that they are the alleged winner of a prize, but that they’d have to either pay to enter the competition or pay to redeem the prize. Phishing, SIM swapping, and the traditional 419 scams (among too many others) are still ever-present threats claiming victims in similar volumes as previous years, despite the rise in awareness of these frauds.

“Considering the online banking trends for the last eight years, it’s evident that our banks have all become increasingly sophisticated at delivering relevant products to the market. Unfortunately, cyber-criminals have kept apace, and use all possible angles to gain an advantage; it’s a trend that not showing any signs of slowing down, in fact, it’s escalating. This reemphasises the need for banks to arm their customers with the relevant information to combat these illicit operators, and for end-consumers to critically evaluate every piece of information they receive – if it sounds too good to be true, it usually is,” Pretorius concluded.

Click here to download an infographic of that summarises the report.

Click here to read more about the report on the Columinate website.

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