Sipho, a small business owner in Johannesburg, received a call from someone claiming to be from his bank’s fraud department. They sounded professional, referenced recent transactions, and warned of suspicious activity. Moments later, a follow-up email — with the bank’s logo and branding — asked him to click a link and verify his account details. The next morning, the funds in his account were gone.

While Sipho’s case is hypothetical, scenarios like his are all too common. Sophisticated social engineering tactics, designed to exploit trust and urgency, are enabling fraudsters to drain accounts and destroy livelihoods.

Fraud is an escalating threat to South Africa’s economic resilience. For consumers, it curbs spending. For businesses, it can stall growth, or worse, lead to failure. As fraudsters continue to hone and innovate their attacks, often mimicking the precision of targeted marketing campaigns, South Africa must look beyond its borders for proven solutions.

A growing threat, and a look at Australia’s playbook
While South Africa’s broader economy differs from Australia’s, its banking landscape is strikingly similar, with most customers banking with the same four major legacy financial institutions. In Australia, these core banks are taking a proactive stance against fraud, leveraging technology and real-time signal-sharing to detect and prevent threats. By adapting such collaborative approaches, South Africa can begin to outpace fraud rather than merely react to it.

In South Africa, criminals stole 1.08 billion rand (about $60.7 million) through digital banking fraud in 2023, according to the South African Banking Risk Information Centre (SABRIC). Meanwhile, Australia lost 2.74 billion Australian dollars (about $1.8 billion U.S.) to financial crime in 2023, according to the Australian Competition and Consumer Commission (ACCC).

Comparing total losses alone, however, fails to communicate the full story. South Africa has one of the highest Gini coefficients in the world (about 0.63), a measure of wealth inequality. The top 10% of earners take in around 60% of the country’s annual income, while the bottom 50% receive just 7%.

In contrast, Australia's Gini coefficient is around 0.33. This means that although the absolute scam losses in Australia are higher, the financial impact on individual Australians – especially those in lower income brackets – is likely to be less severe.

In South Africa, the average loss to financial crime per person totalled just over 20 rand in 2023. Even small losses can be devastating for economically vulnerable citizens, many of whom have only gained access to banking in the last decade.

Australia’s real-time sharing of behavioural intelligence provides a blueprint for rapid progress in South Africa. Notably, Australia’s Trust network does not rely solely on transactional patterns but instead uses behavioural data to anticipate risk.

Behavioural signals, such as hesitation, typing speed, mouse movements, and digital navigation patterns, reveal when a victim is under duress or being coached. Even if the correct password and device are used, these cues can indicate that a scammer is guiding the transaction, such as through impersonation of a bank official or tech support agent.

Australian banks now collaborate in real-time using behavioural data, enabling them to intervene before a high-risk payment is made. When the network identifies risks linked to a receiving account, BioCatch instantly delivers that intelligence to the sending bank, giving it the opportunity to review the transaction before any money leaves the sender’s account.

This proactive approach is already producing results. At National Australia Bank (NAB), for example, targeted interventions helped prevent customers from sending more 48.5 million Australian dollars in fraudulent payments within two months. This was achieved through real-time notifications, without blocking any transactions or incurring the operational costs typically associated with customer follow-up.

Targeting mule accounts
Australian banks are also using behavioural data to tackle the other end of the fraud chain, identifying and mitigating the risks associated with money mules. Mule accounts often exhibit different customer usage patterns than legitimate accounts, such as abrupt changes in login locations, large inbound payments followed by immediate transfers, and minimal engagement with banking apps. By analysing these signals, Australian banks can block suspicious accounts and share intelligence about mule networks across institutions.

The way forward for South Africa
For the moment, the default position in South Africa is that if a customer authorises a payment, even under coercion, they alone must bear the loss. This leaves victims feeling abandoned and erodes trust in the financial system.

Research by the UK’s Payment Systems Regulator (PSR) suggests that customer churn is halved when banks consistently reimburse so-called Authorised Push Payment (APP) fraud.

To effectively combat fraud, South Africa should adopt a collaborative approach like Australia’s and accelerate innovation by taking the following steps:<

1. Adopt behavioural intelligence and enable real-time collaboration across the financial system, with a specific focus on reducing high-risk payments and money mules.
2. Establish industry-wide fraud intelligence sharing and continue to build on the work undertaken by SABRIC to mitigate money laundering and systemic digital fraud risk.
3. Create incentives for concrete action. Whether or not South Africa follows Australia’s prevention-first approach, regulatory pressure will be essential to drive progress.
4. Support these efforts with consumer education and faster incident reporting channels.

With even just some of these proactive strategies in place, retail banks can protect customers like Sipho from even the most convincing of scams. Yes, fraudsters are evolving — able to mimic branding, tone, and urgency — but what’s far harder to replicate is a customer’s unique digital behaviour. Behavioural intelligence can detect these subtle anomalies in real time, giving banks the opportunity to intervene before funds are lost. Incentives will be key to ensuring these strategies are adopted at scale.

The technology exists. The precedent is clear. South Africa shouldn’t wait until losses spiral further. The right thing to do is act now to achieve a smarter, fairer, and more accountable system for fraud prevention.

Australia has shown what's possible when innovators, industry, and government work together. With the right incentives in place, investment becomes both justified and strategic. South Africa can follow suit and better protect its citizens from financial harm in the digital age.