Digital banking fraud is on the rise! What’s the solution?

4 Mar

Absa has recently warned the public that digital banking fraud is on the rise – and they are right!

To come up with a viable solution to the problem, we need to fully understand how the fraud is being committed. Simply put, social engineering is to blame.

Social engineering and data security

“Social engineering” in terms of data security is a process of using deception to manipulate people into sharing their confidential and sensitive information. This information is then used for fraudulent activities with phishing being one of the most prevalent forms of social engineering.

Absa has noticed that more customers are falling victim to the process and end up sharing their card PIN, One Time PIN (OTP), CVV (last 3 digits on the back of your card), online banking username and password with third parties that are posing as legitimate financial and banking institution employees. There was a whopping 64% increase in digital banking fraud in South Africa over 2018.

The problem is not merely data security

Your digital banking profile and the money that it represents are only as safe as your data is. Unfortunately, mid-2018, 4.5 billion consumer data records had been exposed in various types of data breaches, phishing attempts, and spam email.

The fact of the matter is that the problem is not simply limited to the level of security that a person has. For instance, a spam email containing compromising hyperlinks would be useless if it’s ignored. For that to happen, consumers need to be able to tell the difference between a spam email and a legitimate email.

Education is a part of the problem. Consumers need to be more aware of what is considered acceptable and secure correspondence, versus potentially risky communications via the internet, phone, and apps.

Absa’s advice to digital bankers

Ulrich Janse Van Rensburg, the Head of Fraud Strategy for Absa, has released useful tips for the public regarding safe digital banking. In summary, here are the pointers:

  • Never approve transactions via mobile banking apps if you are not personally transacting.
  • Only make use of reputable and safe banking systems such as the Absa (or other bank’s) Mobile Banking Application.
  • Never provide your personal details (PIN, password, CVV etc.) to anyone via the phone or email. A bank will never request these details from you on these platforms.

What can you do?

Consider removing your auto-saved banking data from your devices. One-touch sign in to digital banking apps on your mobile device can result in substantial financial losses, especially if you lose your phone. Avoid making use of new, unknown apps that require your banking details or credit card details. And you should also make sure that you change your passwords regularly.

Have you had a disastrous situation with a digital banking app? We’d love to hear your stories – good or bad!

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