South African banks are urging customers to carefully verify every payment request they receive through mobile banking apps as fraudsters increasingly rely on manipulating users rather than hacking bank systems.
Discovery Bank has issued a fresh fraud alert warning that criminals are now targeting customers directly by convincing them to authorise transactions themselves. According to the bank, this shift reflects the growing effectiveness of banks’ security systems, making it more difficult for criminals to gain unauthorised access to accounts.
The bank advised customers to review every payment approval and card purchase request before confirming a transaction, stressing that legitimate banks will never ask customers to approve a transaction in order to reverse fraudulent activity.
Discovery Bank also warned that anyone who loses a mobile phone or bank card should immediately block their card using the banking app, where possible, and contact the bank’s fraud department without delay. Criminals can exploit lost devices or cards within minutes if protective action is not taken quickly.
Fraudsters increasingly target customers instead of banking systems
The warning comes as behavioural fraud prevention company BioCatch reported a significant rise in sophisticated scams targeting banking customers across South Africa.
According to the company’s latest research, 85% of South African banking executives have experienced an increase in attempted fraud against their institutions. Nearly four out of five respondents reported growing financial losses, while 81% estimated their organisations lose more than US$5 million (approximately R82 million) annually to fraud.
Jonathan Frost, Director of Global Advisory at BioCatch, said banks have become increasingly successful at preventing traditional account takeover attacks, forcing criminals to change their methods.
Instead of attempting to break into bank accounts, fraudsters now focus on persuading victims to approve payments or transfer money themselves through mobile banking applications.
Frost said this trend is affecting financial institutions worldwide and warned that artificial intelligence is likely to make scams even more convincing in the coming years through increasingly realistic phone calls, messages and impersonation attempts.
As digital banking and instant payment systems continue to grow, customers often have only a short period to review payment requests before authorising transactions, creating additional opportunities for scammers to exploit urgency and panic.
Banks strengthen fraud detection as complaints continue to rise
Banks across South Africa are responding by investing more heavily in advanced fraud detection technologies that monitor customer behaviour alongside traditional security measures such as passwords and one-time PINs.
Bonolo Sebolai, Head of Fraud at GoTymeBank, said modern banking security extends well beyond authentication codes and increasingly relies on intelligent systems capable of identifying unusual customer behaviour before fraudulent transactions are completed.
She encouraged customers to download banking applications only from official app stores, avoid responding to suspicious phone calls or text messages, and contact their bank directly whenever they receive unexpected requests involving their accounts.
The latest warning also follows new figures released by the National Financial Ombud Scheme (NFO), which recorded a 73% increase in digital banking fraud complaints. Cases rose from 1,436 during the first five months of 2024 to 2,483 over the same period this year.
The NFO has also highlighted emerging risks involving virtual bank cards. Although virtual cards remain secure, Lead Ombud for Banking and Credit Nerosha Maseti said criminals may create virtual cards after gaining access to a customer’s digital banking profile through phishing, smishing or vishing scams.
Once victims unknowingly provide one-time passwords or approve authentication prompts, fraudsters can use the newly created virtual card credentials to complete unauthorised transactions.
Banks continue to urge customers to remain vigilant, verify every transaction request and report suspicious activity immediately to reduce the risk of financial loss.
Source: BusinessTech