AI-Powered Fraud: A growing threat to South African banking

AI-powered fraud is a growing concern.

This is according to the SA Banking Risk Information Centre (SABRIC), that released their annual crime statistics for 2024.

They said digital fraud cases nearly doubled to 64 000, causing R1.4 billion in losses.

They added that it showed an 18% drop in financial crime losses to R2.7 billion due to improved banking prevention. 

“AI-powered fraud is a growing concern, with digital banking fraud cases nearly doubling to 64 000, causing over R1.4 billion in losses, primarily due to social engineering,” SABRIC said. 

“AI is used to create convincing phishing, WhatsApp messages, and voice deep fakes, with real-time deep fakes expected to be common in 2025.”

In 2023, South Africa recorded financial crime losses amounting to R3.3 billion. 

This figure dropped to R2.7 billion in 2024, representing a reduction of almost 18%. 

SABRIC attributes this improvement to the strengthened prevention and detection measures introduced by the banking industry.

Despite this progress, criminals have adapted to changing conditions, and increasingly, fraudsters are exploiting AI tools to carry out scams, they said.

According to SABRIC CEO, Andre Wentzel, AI related crime is becoming more common.

 “Criminals are leveraging AI to create scams that appear more legitimate and convincing,” he said.

“From error-free phishing emails to AI- generated WhatsApp messages and even voice-cloned deep fakes, these tactics highlight the need for proactive and collaborative strategies to protect consumers.

“Cases almost doubled in volume, rising from 31 612 in 2023 to 64 000 in 2024, while losses increased from R1 billion to over R1.4 billion. Importantly, these incidents were the result of social engineering techniques that exploited human error, rather than technical compromises of banking platforms," they added.

They further explained that card-related fraud continued to be dominated by Card Not Present (CNP) transactions, which made up 85.6% of gross fraud losses on South African-Restricted issued credit cards.

Lost and stolen cards accounted for 8.2%, while false applications contributed 2.9%. 

Counterfeit card fraud also remained a concern, with 64.4% of counterfeit credit card fraud and 63.1% of counterfeit debit card fraud occurring domestically.

They added that toll plazas and service stations were identified as hotspots for such incidents.

 “Protecting the financial sector requires constant vigilance and cooperation across banks, regulators, law enforcement, and civil society,” Wentzel added.

 “Together, we can stay ahead of an ever-changing criminal landscape.”

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