The escalating threat of digital fraud in South Africa’s financial sector requires a sophisticated, co-ordinated, and collaborative response across regulators, banks, telecommunications providers, law enforcement agencies, and other stakeholders.
This was the message from Unathi Kamlana (pictured), the Commissioner of the Financial Sector Conduct Authority, in his opening address to the FSCA’s Digital Fraud Roundtable in Sandton on 5 September.
The Roundtable was preceded by the FSCA’s signing a memorandum of understanding with the South African Banking Risk Information Centre (SABRIC) and the Southern African Fraud Prevention Service to enable the sharing of real-time fraud data, to ensure co-ordinated action in the fight against financial crime.
The Authority has also deepened its collaboration with the Independent Communications Authority of South Africa to help combat the growing misuse of SIM swaps to facilitate fraud.
Kamlana said the digitisation of financial services has produced benefits for consumers and financial institutions. However, criminals are manipulating the same tools that expand access to the financial sector and enhance efficiency in the delivery of financial services.
Criminals operate as organised networks, sharing data, tools, and tactics across platforms, sectors, and borders. Increasingly, they are deploying artificial intelligence to stay one step ahead of traditional controls.
“And now we are also seeing the rise of deepfake technology, which can fabricate voices and identities with alarming realism – an emerging threat not yet fully covered by existing safeguards, but one that criminals are already beginning to exploit,” Kamlana said.
According to SABRIC, R2.72 billion was lost to financial crime in 2024, with most of that (R1.89bn) stemming from digital banking fraud. Incidents of digital fraud increased by 86% last year, while the associated losses rose by 74%. Banking app fraud was the single largest contributor, accounting for more than 65% of all digital banking fraud cases and resulting in losses of over R1.2bn.
Kamlana warned that if digital fraud is not addressed promptly and effectively dealt, it poses a significant risk to public trust, “which is the mainstay of financial sector integrity and stability”.
Components of collaboration
Collaboration in the fight against financial crime and fraud “is the only game in town”, Kamlana said.
“No single bank or any individual financial institution, no single telecommunications provider, no single regulator, or law enforcement agency can fight this battle in isolation. Scammers thrive on fragmentation between sectors, institutions, and even across borders. They exploit the cracks in our systems, and it is in those very gaps that they succeed.”
He said collaboration requires the following:
Real-time intelligence-sharing
This will ensure that a scam detected by one financial institution can be flagged across the entire system before it spreads. “Timely information is one of the most powerful tools we have, and we must use it collectively.”
Joint monitoring of high-risk platforms
Fraudsters are increasingly drawn to certain digital platforms, which give criminals speed, reach, and a degree of anonymity that makes detection more difficult. Tackling them requires joint surveillance – banks, telcos, and regulators pooling data, flagging suspicious patterns, and acting together to cut off avenues for abuse.
Embracing technology
The same innovations that criminals misuse can be deployed responsibly to strengthen the financial system’s defences. “If used wisely and collectively, these technologies can help us detect fraud earlier, intervene faster, and give consumers greater protection and trust in the system.”
Aligned policies and regulatory frameworks
Criminals do not only exploit technological loopholes but also regulatory gaps. “If a fraudulent scheme is prohibited in one sector but not in another, or if oversight is strong in one jurisdiction but weak in its neighbour, scammers will exploit the weakest link. That is why policy alignment is essential.”
Strengthening enforcement and accountability
Regulators, the South African Police Service, the National Prosecuting Authority, and other law enforcement agencies must work together to investigate, prosecute, and disrupt criminal networks.
Consumer education and awareness
Even the strongest defences can be undermined if consumers are vulnerable. Scammers prey on fear, anxiety, and lack of awareness. “That is why consumer education is so important – it is a frontline defence. We must ensure that South Africans know how to spot fraudulent messages, how to verify information, and how to protect their personal details.”
Co-operation with the banks
The FSCA has begun taking concrete steps to strengthen a co-ordinated approach to scams and fraud, Kamlana said.
Through its Digital Banking Fraud Project, the Authority is working closely with the banking industry to identify fraud risks and close vulnerabilities. It has established workstreams on common reporting, fraud mapping, disruption of criminal flows, real-time monitoring, and consumer education.
The FSCA has also intensified its supervisory engagements with financial institutions, making it clear that fraud risk is not merely an operational matter but a governance and conduct risk that requires focused attention at the highest levels.
However, Kamlana said for this work to be truly effective, it must extend across the entire financial sector, including insurers, retirement funds, investment firms, and other institutions.
