Financial crime losses drop, but Sabric warns of the rise of AI-backed scams
Sabric's 2024 crime statistics reveal an 18% decrease in financial crime losses, but the rise of AI-driven scams poses a new threat to consumers.
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The South African Banking Risk Information Centre (Sabric) has warned that criminals are making use of artificial intelligence to make their scams seem like the real deal.
Sabric released its annual crime statistics report for 2024, revealing a substantial 18% decrease in financial crime losses, from R3.3 billion in 2023 to R2.7 billion in 2024. The report said this positive trend is a testament to the growing efficacy of the banking industry's enhanced prevention and detection strategies.
However, while losses have diminished, the report warned of a burgeoning menace: the use of artificial intelligence (AI) in scams that can easily deceive even the most vigilant consumer.
Sabric CEO, Andre Wentzel, said: “Criminals are leveraging AI to create scams that appear more legitimate and convincing.”
He elaborated on the implications of this technology, citing examples such as flawless phishing emails, AI-generated WhatsApp messages, and alarmingly realistic voice-cloned deepfakes that mimic individuals and banking officials. Wentzel cautioned that as these technological advancements continue, real-time deepfake audio and video could become commonplace in fraud schemes.
Digital banking fraud has emerged as the dominant mode of financial crime, accounting for 65.3% of reported incidents in 2024. The volume of these cases skyrocketed, nearly doubling from 31 612 in 2023 to an alarming 64 000 in the past year, with losses increasing from R1 billion to over R1.4 billion. This surge in fraud is primarily due to social engineering tactics that exploit human error rather than technical vulnerabilities in banking platforms.
Beyond digital fraud, other crime categories saw a decrease. ATM attacks fell by 18 percent, leading to a remarkable 44% reduction in cash losses. Furthermore, associated robberies experienced a drastic drop of 35%, with losses to clients down by an impressive 64%. According to the report, these improvements can be credited to the collaborative efforts of an industry-wide task team focused on diminishing the occurrence of ATM bombings.
Despite a decrease in overall financial crime, card-related fraud remains a critical concern, particularly through Card Not Present (CNP) transactions, which constitute 85.6% of gross fraud losses on South African-restricted credit cards.
Cases involving lost and stolen cards accounted for 8.2%, with false applications contributing a further 2.9%. The prevalence of counterfeit card fraud is also alarming, with 64.4% of such incidents occurring on counterfeit credit cards and 63.1% on counterfeit debit cards, particularly at toll plazas and service stations.
In light of these findings, Sabric said it was committed to bolstering consumer education and awareness initiatives, enhancing collaboration across the banking industry, and investing in cutting-edge technology to protect the financial sector. Wentzel underscored the necessity of ongoing vigilance and cooperation among banks, regulators, law enforcement, and civil society. “Together, we can stay ahead of an ever-changing criminal landscape.”
Meanwhile, consumer fraud was the second most experienced crime by individuals according to the latest Governance, Public Safety and Justice Survey (GPSJS) 2024/25 report released by Statistics South Africa (Stats SA).
The report, released this week, also revealed that housebreaking was the most common crime experienced by households in South Africa. Consumer fraud included deceptive practices in the quality or quantity of goods/services, such as advance-fee scams (e.g., R99 card scam, 419 scams, online shopping fraud).
Individuals over the age of sixteen were asked if they experienced consumer fraud a year before the survey.
It was found that consumer fraud incidents rose from 552 000 in 2023/24 to 811 000 in 2024/25.
Southern African Fraud Prevention Service (SAFPS) CEO Manie van Schalkwyk said: “The Stats SA report shows there was an increase observed in fraud incidents in the last few years, which is in line with what we are seeing. Fraud in general is increasing, as technology advances and tactics become more sophisticated.”
Van Schalkwyk said some consumers choose not to report an incident for various reasons, including not knowing where to go, distrust, or embarrassment. Therefore, reporting numbers may not be a true reflection of the fraud occurring.
“We encourage consumers not to feel embarrassed to report incidents to the relevant authorities; the tactics being used are so advanced that it can happen to anyone. Data gathered from these reports assist organisations to build intelligence to help fight fraud,” Van Schalkwyk said. He said the most effective layer of defence is for consumers to educate themselves about fraud tactics and prevention methods.