Capitec’s R300 million fraud battle
Capitec has highlighted the fraud challenges that it is facing, with the company stopping R300 million in client fraud this year.
At its inaugural innovation exchange, Capitec announced that its AI-driven security system had stopped R300 million in fraud, blocked 80,000 mule accounts, and prevented 200,000 scammer payments.
Capitec is South Africa’s largest bank by customer numbers and market capitalisation, with billions of rand in assets.
Capitec CIO Wim de Bruyn noted that South African consumers lost R2.7 billion to financial crime in 2024.
“It’s a daily battle – and we are fighting it with industrial-scale technology,” noted De Bruyn.
Head of Financial Crime, Nick Harris, noted that Capitec’s 2,000-strong team of engineers is leading the fight against financial crime.
The engineers created advanced fraud-detection models, cloud-based client-verification tools, and behavioural analytics, which prevented the hundreds of millions in losses.
“One of our first cloud-based implementations in 2023 was a feature that tells clients whether they are really speaking to Capitec,” said Harris.
“Clients have shared remarkable stories about how those alerts stopped a scam in its tracks.”
Capitec also announced another host of client-control features for clients, including:
- Feature lock prevents fraud by locking features that clients rarely use, thereby protecting a phone if it is compromised.
- Digital fingerprint creates a unique phone identity using the contact list, immediately flagging app access from an unauthorised device.
- Location permissions can prevent kidnapping cases and are actively used by 13 million of Capitec’s 14 million app clients.
“We are investing heavily in technology and innovation across all areas of our business, to transform client service – and above all, to invest in trust,” said Capitec CEO Graham Lee.
“The most important application of technology is keeping our clients safe.”
Other updates for Capitec
In addition to its fraud prevention methods, Capitec also implemented a range of other technological updates.
Payment innovation that includes South Africa’s first international e-commerce payments to global platforms like Shein and Netflix.
The company has also made cross-border payments available in 8 African countries and has recently expanded to Pakistan and Bangladesh, with the bank eliminating fees on international card payments.
The bank also delivered close to 450 terabytes of data to its over 1 million Capitec Connect customers.
The most popular update from Capitec is its progress with the Department of Home Affairs (DHA), with the company set to start offering Smart ID and passport services.
Despite having the largest branch network in the country, Capitec did not participate in the DHA’s initial pilot to bring its services to bank branches.
Capitec believed that the previous pilot was not integrated and would result in valuable branch space being used for non-core activities.
However, the new system will adopt a digital-first approach and enable full integration into banking apps and systems, thereby addressing the previous issues it had flagged.
The bank said that the services are currently in pilot, with 100 branches expected to be activated by mid-2026. This will then expand to 300 by year-end.
It then plans to scale the DHA services to its network of over 860 branches across South Africa. Capitec stated that it will launch the service in areas where access to DHA services is limited.
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