Digital banking fraud declines in SA, but more ATMs are being blown up

Crime stats published by the South African Banking Risk Information Centre (Sabric) offer a revealing look at the risks to commercial banking in South Africa and the methods used to shake the sector down. 

“Banking on digital platforms [on app, online and over the telephone] now exceeds all other transaction channels in South Africa and is also the safest,” Sabric said.

“From 2020 to 2021, digital banking fraud incidents decreased by 18% overall. The biggest decline in fraud incidents occurred in mobile banking fraud. While the number of incidents declined, there was a 45% increase in the total gross losses in digital banking in the reporting period.”

So incidents of digital fraud are down, but those pulling off such capers are making off with more loot — a case of quality over quantity. That points to an increased level of sophistication.

But more thuggish methods are also on the rise.

“Overall, there was an 11% increase in ATM attacks during 2021, resulting in a 17% increase in losses,” Sabric said.

“Incidents where explosives were used increased by 15% during 2021.” 

And some of these robbers are not exactly the sharpest tools in the gangster shed.

“Banks that used risk mitigating methods, like dye-stain technology, reported that financial losses from explosive ATM attacks decreased by 9%.

However, in certain instances, perpetrators still took the cash, even though the dye-stain kit had been activated and had marked the money,” Sabric said.

The use of angle grinders as a tool for ATM robberies, by contrast, is becoming less popular, with an 11% decrease in such incidents in 2021.

“This is probably because using an angle grinder is time-consuming and requires a planned and coordinated approach,” Sabric said.

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Still, like their digital counterparts, the angle grinders are hitting pay dirt, with financial losses linked to such robberies up 130% in 2021 compared with 2020.

“Associated robbery incidents” — effectively, stick ’em ups — fell by 8%. 

“The decrease in associated robbery incidents can be attributed to the Covid lockdown regulations, which limited the number of clients at or inside branches. This made it challenging for spotters to target clients who withdrew large amounts of cash inside the bank,” Sabric said.

That assertion misses the obvious point that lockdown restrictions were even more onerous for most of 2020, and so is questionable.

The heists that one sees on TV and in the movies, with an armed gang charging into a bank while a getaway driver waits outside, did not take place at any private bank.

“Traditional bank robberies, where a group of suspects hold up staff and clients at gunpoint, did not occur in 2021 due to safety mitigation strategies implemented by these banks,” Sabric said. 

State-owned banking institutions presented easier pickings, with robberies up 41% to 374.

“The increase in robberies can be attributed to the perpetrators’ perception of higher cash targets related to social grant payments and Covid relief payments as well as the perception that these institutions had inadequate security,” Sabric said.

“Criminals took advantage of Covid protocols, pretending to be clients while wearing personal protective equipment face masks to execute robberies. In some instances, the perpetrators disguised themselves as government officials claiming they had to conduct Covid compliance inspections, to gain access to the institutions to rob them.” DM/BM