{"id":800788,"date":"2024-12-22T07:00:00","date_gmt":"2024-12-22T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=800788"},"modified":"2024-12-20T15:14:48","modified_gmt":"2024-12-20T13:14:48","slug":"fraud-on-the-rise-in-south-africa-what-businesses-can-do-to-tackle-it","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/800788\/fraud-on-the-rise-in-south-africa-what-businesses-can-do-to-tackle-it\/","title":{"rendered":"Fraud on the rise in South Africa \u2013 what businesses can do to tackle it"},"content":{"rendered":"\n<p>The increase of the prevalence and tactics of fraud is significantly hurting trust in digital spaces; which has big implications for both businesses and consumers if something is not done about it.<\/p>\n\n\n\n<p>This is a key finding in LexisNexis Risk Solutions&#8217; <a href=\"https:\/\/risk.lexisnexis.com\/global\/en\/insights-resources\/research\/global-state-of-fraud-and-identity?trmid=BSFRIM24.DIN.NAMGSOF24.WSLN-1328701\"><strong>Global State of Fraud Report<\/strong><\/a>, which outlined that the adoption of AI tools to proliferate phishing, deepfakes and other scams is eroding consumer confidence and trust in digital services.<\/p>\n\n\n\n<p>&#8220;Financial institutions and other organisations find it harder to know their &#8216;real&#8217; customers, and customers can\u2019t be quite sure whom they\u2019re dealing with,&#8221; said LexisNexis Risk Solutions.<\/p>\n\n\n\n<p>&#8220;It\u2019s a crisis that threatens to undermine\u2026well, everything,&#8221; they added.<\/p>\n\n\n\n<p>It emphasises that restoring consumer trust is paramount for the sustainable growth of digital businesses.<\/p>\n\n\n\n<p><strong>Key concerns<\/strong><\/p>\n\n\n\n<p>As technology has evolved, so have fraud tactics. The expanding payments ecosystem, while offering convenience, creates new vulnerabilities and expands the attack surface for fraudsters.<\/p>\n\n\n\n<p>\u201cHowever, <strong>every attempt to make transactions easier for consumers is also making life easier for fraudsters<\/strong>,&#8221; said&nbsp;Stephen Topliss, vice president of fraud and identity, LexisNexis Risk Solutions.<\/p>\n\n\n\n<p>&#8220;Societal demand for convenience has left financial institutions facing a difficult balancing act to&nbsp;deliver technological innovation and convenience, while maintaining trust and system integrity,\u201d he added.<\/p>\n\n\n\n<p>Global fraud attacks rose by 19% year on year, according to analysis of the LexisNexis Digital Identity Network platform.<\/p>\n\n\n\n<p>Rapid adoption of AI-powered technology by fraudsters to automate&nbsp;phishing and deepfakes&nbsp;is helping make scams more efficient and convincing, thereby eroding consumer trust in digital services. <\/p>\n\n\n\n<p>Key trends identified in the report includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Deepfakes, phishing, and other digital threats are eroding consumer confidence<\/strong>, potentially driving consumers back to brick-and-mortar interactions;<\/li>\n\n\n\n<li><strong>Fraudsters are increasingly targeting consumers directly<\/strong>, particularly through APP scams, exploiting legitimate customer authentication;<\/li>\n\n\n\n<li><strong>The global rise of scams, with South Africa experiencing an average loss of $800 (R~R14,500) per scam<\/strong>, highlights the significant financial impact of this growing trend;<\/li>\n\n\n\n<li><strong>Money mule networks are becoming more sophisticated<\/strong>, requiring financial institutions to utilise advanced analytics to detect and disrupt them.<\/li>\n\n\n\n<li><strong>Verifying emerging identities presents a challenge<\/strong>, as these profiles often lack traditional data points and can be difficult to distinguish from synthetic identities;<\/li>\n\n\n\n<li><strong>The popularity of mobile transactions makes the mobile channel a prime target for fraud<\/strong>, requiring businesses to implement mobile-specific security measures.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"NdWbHgPbkB\"><a href=\"https:\/\/businesstech.co.za\/news\/finance\/797696\/experts-warn-of-scams-on-the-rise-in-south-africa\/\">Warning over scams on the rise in South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Warning over scams on the rise in South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/finance\/797696\/experts-warn-of-scams-on-the-rise-in-south-africa\/embed\/#?secret=IhnIFKNWrp#?secret=NdWbHgPbkB\" data-secret=\"NdWbHgPbkB\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>The global report also explores\u00a0the impact of criminal activity on consumer trust;\u00a0compounded by the fact that fewer than 10% of mules identified by law enforcement are arrested and fewer than 1% are charged.\u00a0<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Hope is not lost<\/strong><\/p>\n\n\n\n<p>While there are several key worries identified, the report noted that can build strong digital trust and prevent fraud before it occurs.&#8221;<\/p>\n\n\n\n<p>The company said that this can be done through collaborative digital identity intelligence.<\/p>\n\n\n\n<p>&#8220;A shared collaborative network enables organisations to flag suspicious activity and confirmed fraud events with other members, to help make it harder for fraudsters to operate,&#8221; said the company.<\/p>\n\n\n\n<p>This can include data about the device being used, IP addresses and other digital signals, as well as the email address provided.<\/p>\n\n\n\n<p>LexisNexis said that analysing the potential risk associated with these signals can significantly boost organizations\u2019 effectiveness at capturing high-risk transactions. <\/p>\n\n\n\n<p>In one case a major global bank boosted its detection capability 17-fold (1700%). In another, a card issuer improved its risk assessments by a factor of 23 (2300%). In both cases, collaborative data was used.<\/p>\n\n\n\n<p>Despite this, just six in ten organisations have technological fraud prevention solutions in place across all transaction channels.<\/p>\n\n\n\n<p>This comes despite a majority of firms saying integrating digital experience and fraud prevention efforts (72%) and minimising customer friction during checkout (68%) are \u2018critical or high\u2019 priority.<\/p>\n\n\n\n<p>\u201cConsumers\u2019 desire for faster, instant service is driving demand for change, including the creation of alternative payment solutions,&#8221; said&nbsp;Topliss.<\/p>\n\n\n\n<p>&#8220;In response, regulators and central banks are enabling systems, such as instant payment rails, which make transactions easier,&#8221; he added.<\/p>\n\n\n\n<p>Broader insights are also essential in the fight against synthetic identities \u2013 fake digital profiles created for fraud. <\/p>\n\n\n\n<p>LexisNexis said that robust intelligence can reveal telltale signs, such as synthetic identities are seven times more likely to have no first-degree relatives and 20 times more likely to appear in multiple credit applications over a short time period.<\/p>\n\n\n\n<p>\u201cThe worst-case scenario is that consumers cease engaging digitally because they don\u2019t trust the process. Tackling this global issue requires a multi-layered approach, as there is no silver bullet anti-fraud solution,\u201d added Topliss.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/800485\/south-africas-r48-billion-untapped-gold-mine\/\">South Africa\u2019s R48 billion untapped gold mine<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>LexisNexis warns that fraud tactics are evolving with technology, eroding consumer trust, and calls for collaborative efforts to prevent scams.<\/p>\n","protected":false},"author":101,"featured_media":795298,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1334,21064,13976,20864],"class_list":["post-800788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-fraud","tag-global-state-of-fraud-report","tag-lexis-nexis","tag-lexisnexis-risk-solutions"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/101"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=800788"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800788\/revisions"}],"predecessor-version":[{"id":804894,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800788\/revisions\/804894"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/795298"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=800788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=800788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=800788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}