Southern Africa experiencing increased mobile, Internet banking fraud

As Internet access costs decline and people flock to the Internet, cybercrime rises

Mobile and Internet banking fraud is on the rise in Southern Africa and is threatening to derail the progress that has so far been made to revolutionize banking services in the region.

Zambia and South Africa, especially, have been experiencing an increase in mobile and Internet banking fraud, resulting in millions of dollars in losses.

Officials in both Zambia and South Africa are warning banks they should not compromise on security in light of the increased risks. A new report for banking services compiled by the Ombudsman for Banking Services in South Africa has revealed an increase of 8 percent in mobile fraud and 3 percent in Internet banking fraud cases in the country.

"There has never been a greater need for security and control in the banking environment than currently because of the rise in Internet banking fraud," the report said. It added that banks have a duty to commit to the country's code of banking practices, which calls for a secure and reliable banking and payment system.

No report has been produced in Zambia on cybercrime levels in the country but the Bankers Association of Zambia (BAZ) has warned banks about an increase in cybercrime and urged them to put precautionary measures in place.

A number of local and international banks in Zambia have reported phishing attacks on their Internet banking systems, and in some cases they have been forced to temporarily close branches to protect customers' money.

Africa is experiencing an explosion of mobile money services as banks and mobile service providers compete for customers who would otherwise not have a bank account. This has increased phishing attacks on unsuspecting customers, in an effort to lure them to fake sites.

Banks in the region are encouraged by the growing mobile customer base to launch innovative payment options to reach millions of the so-called "unbanked." But that is putting citizens more at risk of cybercrime. In South Africa, for example, there are more than 13 million unbanked people, while in Zambia, 60 percent of the population is currently unbanked.

The problem has further been compounded by the fact that very few banks in the region that provide Internet banking services are also able to offer security software to curb cybersecurity attacks.

Cybercrime in the region is said to have increased following the lowering of bandwidth and connectivity costs as mobile service providers and international cables compete for customers.

In Zambia, the Zambia Information and Communication Technology Authority (ZICTA), the country's telecom sector regulator, claims it has managed to reduce Internet cost by more than 700 percent.

ZICTA chairperson Gertrude Akapelwa-Euheni said, "the overall goal of ZICTA was to achieve greater Internet penetration."

Like many other countries in the Southern Africa region, in Zambia a 1GB Internet package now costs as low as US$23, down from as high as $130 just some three years ago.

"What has added to the problem in addition to the reduction in Internet cost is that phishing kits can now be easily acquired while cybercriminals no longer need to be highly trained to be able to use phishing kits or technology," said Edith Mwale, telecom analyst at Africa Center for ICT Development.

Over the past few years, the Southern African region has been trying to harmonize cyberlaws to deal with cross-border criminals by allowing member countries to prosecute cybercriminals wherever the crime was committed in the region.

However, progress has been slow in several countries.

Join the CSO newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicessecurityBankers Association of Zambiainternetfraud

More about Technology

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Michael Malakata

Latest Videos

  • 150x50

    CSO Webinar: Will your data protection strategy be enough when disaster strikes?

    Speakers: - Paul O’Connor, Engagement leader - Performance Audit Group, Victorian Auditor-General’s Office (VAGO) - Nigel Phair, Managing Director, Centre for Internet Safety - Joshua Stenhouse, Technical Evangelist, Zerto - Anthony Caruana, CSO MC & Moderator

    Play Video

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

More videos

Blog Posts

Market Place