Nedbank warns South Africans with banking apps on their phones

Nedbank has warned that criminals are increasingly targeting smartphones, which expose the victims’ personal data and digital banking accounts.

Nedbank stressed that South Africa’s high crime rate makes it vital that you secure your belongings, whether at home or in public.

“Take special care to keep your digital devices safe – the combination of easy portability and high value makes them more attractive to burglars, pickpockets, smash-and-grab robbers, and bag snatchers,” the bank said.

However, it added that what might be more of a concern to South Africans is that having your smartphone stolen can expose your personal data and digital banking accounts to criminals and identity theft.

Nedbank highlighted that recent statistics analysed by the Institute of Security Studies reveal a sharp increase in phone theft.

According to the South African Police Service (SAPS), 189 cell phones are stolen on average daily in South Africa.

Between April 2017 and March 2023, the SAPS reported 412,998 stolen mobile phones, with only 29% blacklisted by service providers.

Gauteng accounted for the highest percentage of thefts (29%), followed by the Western Cape (26%), KwaZulu-Natal (20%), and the Eastern Cape (7%).

However, the problem could be far worse when you consider the latest statistics from the SAPS over the three months ending 3 January 2025.

According to data from the SAPS, 116,293 stolen cell phones were recovered from October 2024 to January 2025, representing 1,292 phones per day.

Speaking to SABC News, Manie van Schlkwyk also said the SAFPS had noted an increase in thefts of mobile phones, with criminals specifically targeting banking apps.

“Cellphones are stolen, and then, by using the banking app on that phone, criminals are somehow gaining access to bank accounts,” said van Schlkwyk.

Van Schlkwyk added that the SAFPS also flagged an increase in cases of people being defrauded after being hijacked, with criminals forcing them to transfer money using their banking apps.

Rise in kidnapping a concern for Banks

Following an emerging trend of hijackers and other criminals kidnapping individuals to gain access to their bank accounts, Major banks are now looking into ways to combat the rise in forced app-initiated transactions.

In 2023/2024, the police registered 17,061 kidnapping reports, an 11% increase from 2022/2023. Over the past decade, reported kidnappings have increased 260%.

Previously, Kidnappers primarily targeted high-net-worth individuals to withdraw money at ATMs or extort ransoms from their families or companies.

However, police and private security companies have observed an increase in “express kidnappings” of soft targets, including lower-income and middle-income victims.

With the rise of digital banking solutions, South Africans are increasingly moving away from cash transactions.

This change reduces the amount of cash people carry, lowering the chances of quick-getaway robberies during withdrawals or deposits.

Banking apps offer features such as adjustable payment limits, instant loan applications, and increased overdrafts.

They also use biometric security and two-factor authentication to protect accounts. As a result, criminals often need the customer present to access their accounts, which can lead to longer hostage situations.

MyBroadband asked South Africa’s major banks how they were tackling this complex and increasing crime. These banks included FNB, Nedbank, Absa, and Discovery.

In collaboration with law enforcement, banks said they have established an industry steering committee to address kidnappings and forced transactions.

they also noted that dedicated teams of trained professionals are in place to respond swiftly, with the authority to block accounts and trace funds, recognising the urgency of these situations.

While there has not been a significant increase in reported forced transactions across some banks, substantial investments are still being made to improve app security and protect customers in life-threatening situations.

Banks acknowledged the need to balance advanced security measures with the potential risks posed in high-stress scenarios involving armed perpetrators, as overly rigid systems could increase danger or prolong ordeals.

To further protect customers, innovative features are also being introduced. One bank recently launched a panic code system, allowing users to set a unique unlock code for high-value accounts.

This code discreetly alerts the bank’s fraud department and law enforcement if the customer is in distress, enhancing both prevention and rapid response capabilities.