South African banks look to biometrics to reduce fraud 11. Aug. 2016 Business Day
|
|
IN OCTOBER 2015, the South African Banking Risk Information Centre (Sabric) released its card fraud report which found that while credit card fraud decreased in 2015, debit card fraud is on the rise, accounting for over R257m in losses last year.
This shift from credit card fraud to debit card fraud can be attributed, at least in part, to the roll-out of new technology. The deployment of chip and pin has decreased the amount of credit card fraud yet, unfortunately, the fraud does not simply disappear.
Rather, the attack vector moves to areas that are more susceptible to fraud and where new technology has not yet been adopted.
For example, Standard Bank was targeted this May by a counterfeit ATM card scam and lost over R300m within a period of three hours in Japan. Why Japan? The primary reason is that ATMs in Japan continue to support the use of magnetic strip card data in addition to the more secure chip and pin. Yet, even chip and pin technology is not infallible and is vulnerable to card trapping. With the global rise in identity theft, it must be acknowledged that establishing an individual`s true identity is critical to preventing account fraud.
The only true way to bind an account to an individual is to use the authorised individual`s personal characteristics — their biometric information.
The Department of Home Affairs (DHA) is leading the way in biometric authentication, with the Home Affairs National Identification System (Hanis) and the inclusion of fingerprint data on the new national ID card. Since 2010, South African banks have reduced account fraud by confirming individual identities with Hanis. Today, individuals can enrol for the new Smart ID card at selected bank and home affairs branches, with the ultimate goal being use of either a smart ID card or Hanis to confirm identity.
Seven banks now use Hanis in their branches during account origination, for an estimated savings of an impressive R322m a month, according to an announcement by Home Affairs Minister Malusi Gigaba.
He estimates that the value of loss prevention sits at around R3bn a year, a figure which is likely to rise as transactions increase due to additional people becoming banked. On the mobile front, in 2015 Standard Bank introduced the capability for its banking members to authenticate with the fingerprint sensor included on the iPhone with its mobile banking application. At ATMs, it`s expected that fingerprint biometrics will replace or augment the use of a PIN (personal identification number).
In a recent post, KPMG SA emphasised how all these shifts in technology investment and the move to a biometric authentication ecosystem were playing a vital role in security and safety.
Fingerprint identification is allowing for banking organisations to whittle down identity fraud as individuals have to use their fingerprints to prove who they are. The banks` adoption of
| | technology to confirm an individual`s identity is providing benefits to both the consumer and the bank. Perhaps we`re even seeing the end of a time where a falsified document or counterfeit ID book is all that is needed to commit fraud.
Not all biometrics are the same however. A poorly designed biometric system is incapable of handling different skin types and conditions, and is unable to distinguish between a live fingerprint and a fake one. A biometric fingerprint verification system must be designed properly to deliver the expected security benefits and positively impact consumers. Biometric technology that is capable of reading fingerprint patterns under the skin bypasses issues with worn fingerprints, wet or dirty hands, and fake fingers. Additionally, liveness detection capability is critical to ensure the biometric information being presented is legitimate. For example, without a requirement for liveness detection, if the biometric data that was captured during the enrolment process is accessed and hacked, it could be used to falsify identity. With liveness detection, the only way to authenticate is with both the matching biometric information and the proof of life. Stolen biometric data would be rendered unusable.
PINs, passwords and identity documents will continue to be used to confirm an individual`s identity, but without biometrics they are vulnerable to increased levels of fraud. As we`ve seen with the banks, there are better ways to confirm identity. Within banking, the use of biometrics is increasing from the teller station and mobile devices to the ATM. Outside of banking, the use of biometrics to properly confirm identity is migrating to healthcare, telecommunications and retail.
With the growing cost of identity theft, the industry is finally responding and investing in more effective ways to ensure that transactions and personal identities are secured. Highly reliable and intuitive technology is critical, whether it be at a bank ATM or the till. To establish proof of life instantly and to secure identities comprehensively — all with a simple touch of a finger — provides benefits today that are difficult to refute.
While many still associate biometrics with futuristic imaginations, it is steadily becoming a standard across SA. Each of the top banks in SA is using biometrics to identify individuals. Voice recognition is used for phone banking and fingerprint verification is used within branches and on some mobile devices. For consumers, biometrics provides a convenient layer of much-needed protection against the growing tide of clever charlatans. For banks, secure and convenient access to banking systems is improved, while exposure to fraud is decreased. V.1690 |
|
More related News
|
|
| |
|
Critical Skills Visa 02. Oct. 2025 SA Migration | | More than 380k South Africans blocked from IDs lawyers challenge home affairs 26. Aug. 2025 News 24 |
One of the highlighted topics: Critical Skills Visa.
- Key Insight: Is your profession on the Critical Skills List? This visa is your fast track to working in South Afr... - This matter relates to critical skills visa and its broader implications. - Individuals are advised to seek professional guidance.
Is your profession on the Critical Skills List? This visa is your fast trac V.6139 Click here for full article | | One of the applicants, Phindile Mazibuko, became a victim of identity theft in 2012 when fraudulent transactions occurred, using her personal details.
-The Pretoria High Court found that the department of home affairs had violated constitutional rights without due process. -Only half of Lawyers for Human Rights` test group has been unblocked, while 385 000 identities remain blocked nationwide. -LHR appeals extension, urges affected people to seek help now.
Lawyers for Human Rights (LHR) are intensifying pressure on the department of home affairs over the national ID-blocking crisis, accusing the state of acting too slowly to unblock qualifying individuals despite a landmark court ruling.
In January last year, the Pretoria High Court found that the department`s practice of blocking IDs without due process was unlawful and unconstitutional. One of the applicants, Phindile Mazibuko, a Swati citizen and South African permanent resident since 1998, fell victim to identity theft in 2012 when fraudsters used her personal details.
V.6133 Click here for full article |
|
Airport Immigration Alert 25. Aug. 2025 SA Migration | | Airport Immigration Alert 25. Aug. 2025 SA Migration |
The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.
What does this mean for travelers? V.6128 Click here for full article | | The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.
What does this mean for travelers? V.6129 Click here for full article |
|
A New Zealand mother and her 6-year-old son released from US immigration custody after being detained for weeks 25. Aug. 2025 CNN | | High Court upholds corporate visa refusal: Implications for businesses 25. Aug. 2025 Biz Community |
A Washington state mother and her 6-year-old son have been released after spending more than three weeks in US immigration detention due to a brief trip to Canada and a small paperwork mistake, her attorney told CNN on Saturday.
Sarah Shaw, a New Zealand citizen who has lived legally in the US since she arrived in 2021, was detained at the Blaine, Washington, Customs and Border Protection checkpoint when returning home after dropping her two oldest children off at the Vancouver airport for a flight to visit their grandparents in New Zealand. Shaw, 33, chose the flight out of Vancouver because it was direct and she didn`t want her children to have to navigate a layover alone, her attorney Minda Thorward, told CNN.
V.6130 Click here for full article | | On 22 July 2025, the Gauteng High Court dismissed Sitrusrand Boerdery`s review of the Department of Employment and Labour`s refusal to issue a Working Conditions and Salary Benchmarking Certificate, an essential precondition for obtaining corporate visas under the Immigration Act.
Acting Judge Kekana AJ held that the Department`s decision was lawful, rational and procedurally fair. This judgment illustrates how businesses can - and must - structure their corporate visa applications to meet statutory requirements, and how legal practitioners should prepare robust review challenges when administrative authorities decline to recommend foreign-work permits.
V.6131 Click here for full article |
|
US faces 9.4bn dollars tourism loss from new 250dollars visa fee targeting African countries 25. Aug. 2025 businessinsider | | Airport Immigration Alert 21. Aug. 2025 SA Migration |
The United States could forfeit an estimated 9.4 billion dollars in visitor spending over the next three years following the introduction of a new 250 dollars `visa integrity fee,` according to industry groups, who warn the policy risks undermining tourism and costing thousands of jobs. The United Statesâ decision to introduce a 250 dollars `visa integrity fee` on international visitors has triggered sharp criticism from the global tourism industry, with officials warning that the measure could deter millions of travellers and cost the U.S. economy billions. The 250dollar `visa integrity fee,` part of the One Big Beautiful Bill Act signed on July 4, 2025, will take effect later this year. According to immigration law firm Envoy Global, it applies to all nonimmigrant visa holders which include students, tourists, temporary workers, and business visitors particularly from African countries. V.6132 Click here for full article | | The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.
What does this mean for travelers? V.6127 Click here for full article |
|
ARRESTED & UNDOCUMENTED: WHAT ARE YOUR OPTIONS? 20. Aug. 2025 SA Migration | | E-Hailing & Scooter Drivers in South Africa â` Why Being LEGAL is CRUCIAL! 20. Aug. 2025 SA Migration |
1. Right to Legal Representationâ¢You have the right to consult with a legal representative.â¢Contact an immigration practitioner, legal aid clinic, or attorney urgently.â¢Do not sign any documents without understanding them fully. 2. Section 34 of the Immigration Actâ¢You must be brought to court with 48 hours to confirm arrest but you can remain locked up very long as courts figure out what to do with you â¢If you`re found to be illegally in South Africa, you may be detained for up to 30 days (extendable by a magistrate) pending deportation.â¢BUT this cannot happen arbitrarily. You must be informed of your rights, and Home Affairs must follow due process.- becomes a nightmare , you could lose your job , business , place to stay V.6121 Click here for full article | | Driving for Bolt, Uber, Mr D, or Checkers Sixty60?If you`re undocumented, you`re risking more than just your income.The Risks if You`re Not Legal: - Vehicle impoundment - Heavy fines - Arrest & deportation - Permanent bans from working in SA V.6122 Click here for full article |
|