Isaac Moledi

Isaac Moledi

Incidents of fraud in the banking industry are increasing, says Carl Bosma, a director specialising in technology and risk advisory services at auditing firm BDO Spencer Steward.

The incidents involving electronic funds transfers (EFTs), Bosma says is as a result of the current economic downturn.

"The scams are often elusive, creative and complex," he says.

Bosma says while South Africa has among the highest fraud and corruption statistics in the world, the UK experienced an increase of more than 185percent, amounting to more than R300million, in online banking fraud during January to June last year.

He says though local fraud figures have not been released, his company recently witnessed various cases of EFT fraud.

Examples include inadequate training provided to system users resulting in fraudulent transactions involving more than half a million rand within two weeks.

Other cases involved user privileges, which were not being regularly reviewed, resulting in abuse by staff with excessive permissions, as well as the interception and the modification of intermediary files generated by applications such as a payroll, prior to up-load into the banking application.

"Given that the advent of electronic banking has shifted a lot of responsibility to the client, with banks carefully repudiating liability, it is in the best interest of clients to review their electronic banking system and processes to ensure that controls are adequate and functioning as envisaged," advises Bosma.

Large sums of money are transmitted at the click of a mouse, with clients falsely secure under the impression that because they keep their passwords safe, these transactions are protected.