As access to banking services through digital channels continues to grow, so does the need to protect consumers against the prevalence of online banking fraud, YOLANDE STEYN, Head of Innovation at FNB, outlines eight scams to watch out for.
“We view security as an integral part of a seamless online banking experience,” says Yolande Steyn, Head of Innovation at FNB. “Therefore, due to the prevalence of banking scams, we urge consumers to be more vigilant and familiarise themselves with the different types of online banking fraud.
“FNB proactively closes down fraudulent phishing websites used by criminals to try and access customers’ confidential banking details.”
Steyn outlines the latest online banking scams that target consumers:
Flight purchase debit scams – you will receive an SMS informing you of a flight purchase debited to your account. Fraudsters will request you to select a link in the SMS to revise the transaction.
When you select the link, you will be redirected to a fake FNB website. You are then redirected to an ‘Update and Confirm Details’ screen requesting more information to be verified. The fraudsters will now be in a position to access your banking profile.
Social media scams – beware of fraudsters pretending to represent FNB or RB Jacobs on social media channels such as Facebook, Twitter, LinkedIn, WhatsApp or any other social media platform. We will never ask for your credit or cheque card, account number, online banking login details or password or One Time PIN (OTP) on social media platforms. FNB’s official social media accounts are @FNBSA and @RBJacobs on Twitter and FNBSA on Facebook. The official accounts also display a blue tick indicating that they are verified.
Change of banking details scam – you will receive an email that pretends to come from one of your suppliers asking you to update your banking details. Beware of this even if it is on the supplier’s letterhead.
Contact your supplier on the number that you already have for them and not the one on the fraudulent letter. Speak to someone you know at the supplier to confirm the change in banking details.
Copy of payment notification scam – you will receive an email requesting you to open a copy of your payment notification. Fraudsters will prompt you to login via the email attachment.
When you open the attachment in the email, you will be redirected to a fake FNB website. In an attempt to steal your banking details you will be requested to login. As soon as you enter your login details on the screen, you are redirected to a successfully logged out screen. The fraudsters will now be in a position to access your banking profile.
419 scams – this is communication by e-mail to a recipient making an offer that would result in a large pay off for the recipient. The details vary and large amounts of money are usually involved. Invariably, the victims’ banking details as well as sums of money are said to be required in advance in order to facilitate the payment of the funds. Essentially, the promised money transfer never happens and in addition the fraudsters may use the victims’ banking details to withdraw money for themselves.
Vishing and smishing scams – this is phishing, but instead of being lured to a fake website via email, you receive a call or SMS, where the individual pretends to be from the bank or other companies and gets you to disclose personal information such as your ID number, address, account number, username, login details, password and PIN. This information can also be used to gain unauthorised access to your banking account online.
OTP Email Fraud – using various methods of phishing, criminals also try to get access to your email accounts, commonly Gmail, Yahoo, etc. They produce fake login sites that look like Gmail or Yahoo. Once they have your email username and password, they have access to your emails (statements, personal communications) and this helps a criminal to build a social profile of you. Criminals can also intercept One Time Pins (OTPs) that are sent to emails once they have access to your email account.
OTP SIM Swop Fraud – once criminals are in possession of your username and password, they can easily access your accounts on Online Banking. They can also contact your service provider to do a Sim Swop which basically means that they hijack your sim and have access to your SMS. This also gives them access to your One Time Pin (OTP).
“Remember, the bank will never ask for your username, password or PIN in an email, SMS, social media or phone call,” says Steyn. “Never select a link to our website that was sent via email. Always type in the web address.”
VoD cuts the cord in SA
Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.
The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.
Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
New data rules raise business trust challenges
When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.
The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.
GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.
The fundamentals of trust
GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.
The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.
This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.
What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.
The risk of compliance
Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.
A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.
A three-step plan of action
So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:
Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.
Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.
Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.