The banking landscape has shifted to digital. Covid-19 accelerated the move towards the digital banking, as a result of strict lock down regulations. As a result, financial institutions are under pressure to adapt and innovate as they face the evolving demands of the modern consumer and increasing disruption from rapidly emerging technologies. FNB reported an increase in average ecommerce spend on its merchant devices through the first half of 2020 of 30% year-on-year. The move to digital, means easy convenient banking for customers with most banking functions now a click away on an app or website. While this has streamlined banking in South Africa, there is the unfortunate downside and that is an increase risk of online fraud. Whether you have been a victim or know someone that was a victim, fraud in the banking space can rear its ugly head if consumers are not vigilant.
What is online banking fraud?
Online banking fraud is a fraud or theft committed using online technology to illegally remove money from a bank account and/or transfer money to an account in a different bank. Internet Banking Fraud is a form of identity theft and is usually made possible through a number of different scams and techniques. Online fraud is currently at an all-time high as the country moves to more digital banking. Although the threat is significant, vigilant customers reduce the risk significantly of having funds stolen from them Knowledge is key and knowing some of the scams at play can put you in a better position to identify when someone is trying to defraud you:
Phishing, vishing and smishing:
Phishing, vishing and smishing are email, telephone and mobile scams to steal your personal information for fraudulent activities. Phishing (email) and smishing (SMS) involve fraudsters asking you to click on a link that directs you to a fake website prompting you to enter your personal information. Vishing is social engineering over the telephone and involves fraudsters calling you and posing as bank employees who then try to con you into giving them your personal information. Their most-used tactic is to pose as a representative from the fraud department, trying to scare you into giving them your card PIN or Online Banking password to stop a fraudulent transaction.
Identity theft:
Scammers come up with creative ways to get their hands on your personal information. Once they have enough information about you, they can impersonate you, instructing financial institutions to perform certain actions on your behalf like withdrawing money. Social engineering involves fraudsters manipulating you to share confidential information such as your Online Banking passwords, ID number, card number and PIN, or they even get you to allow them access to your computer by clicking on links and giving permission to install some sort of update. Scammers often use tactics like saying that your account will be blocked, fraud has been committed on your account or that you need to update security software.
Card theft:
A fraudster would call you, posing as your Banks employee, trying to convince you to give your card details over the phone. There are many scams they use to try and trick you into doing this, such as banking rewards that will expire, an amount has been deducted off your account incorrectly or upgrading for free to better banking platforms. With your card details, an online scammer can process transactions from your account.
Tips on how to be safe:
While the risk of online fraud has increased due to digitalisation, the number one weapon against these forms of attack is customer vigilance. The following points can help protect you against an online scam:
Whilst these threats do pose a danger, take comfort in the fact that help is just an email of phone call away. The banks take these types of scams very seriously and will assist wherever necessary to prevent any of these attempts from causing harm. Stay mindful when using online applications, with vigilance a sure way to significantly reduce online fraud risk.
