Digital Banking Fraud in South Africa Soars 86% as AI Scams Rise

South Africa’s banking sector is facing an alarming rise in financial crime, with digital banking fraud, application fraud, and card-related crime reaching record highs in 2024, according to the South African Banking Risk Information Centre (SABRIC).

The Annual Crime Statistics Report 2024 reveals that digital banking fraud incidents soared by 86%, with associated losses climbing by 74% to R1.888 billion.

Criminals are increasingly exploiting generative artificial intelligence to craft sophisticated scams, including deepfake-enabled impersonations, phishing campaigns, and AI-generated documents.

“AI has given criminals new tools to exploit human error, making scams harder to detect,” the report notes.

Application fraud also surged, with Vehicle Asset Finance (VAF) fraud recording a 49.6% jump in incidents and a 71.1% increase in potential losses, totalling R23 billion.

Fraud rings continue to use vehicle cloning, synthetic identities, and illegal ownership changes to evade detection. Unsecured credit fraud rose by 57.6%, with losses more than doubling compared to 2023.

Card fraud remained a major concern, with gross losses increasing by 26.2% year-on-year, reaching R1.466 billion. “Card-not-present” transactions—online and remote purchases—remain the leading source of losses.

Despite these concerning trends, the report highlights some successes. Contact crimes, such as associated robberies, dropped by 35%, with client losses reduced by 64% thanks to joint efforts between banks and the South African Police Service (SAPS). ATM explosive attacks also fell by 18%, credited to a specialised task team using intelligence-driven strategies.

SABRIC warns that the fight against financial crime is as much about human behaviour as it is about technology. Social engineering remains the most common tactic, with criminals tricking customers into handing over confidential information.

To counter these threats, banks are strengthening authentication measures, deploying biometric verification, and expanding public awareness campaigns.

“As financial crime grows in scale and sophistication, collaboration across the industry, law enforcement, and technology partners is critical,” SABRIC said, reaffirming its commitment to safeguarding South Africa’s banking sector.