Sophisticated fraud syndicates have met their match with a secure funds transfer system developed jointly by Standard Bank and business forms printer Lithotec.
The ability to pay overseas suppliers and customers is critical to the smooth running of any import-export business. For many banks, the facilitation of such money transfers is a major slice of their business as they act as a trusted intermediary between local companies and their foreign counterparts, and ensure that Reserve Bank regulations are met.
Standard Corporate and Merchant Bank (SCMB) business manager Petrus Robertse says a weakness in the system is that the Reserve Bank regulations require a form to be completed by the local company making the payments and an original signature is on the form. The main problem is that fraudsters often forge the signatures, take the forms to the bank near to closing hours, pressurise the banking staff into completing the transfer and then have their own counter-party in a foreign land withdraw the amount, usually when the SA banks are closed for a public holiday.
He says these sophisticated syndicates could have cost SA banks and corporations billions of rands over the past decade. While no official numbers are released, it is known that these transactions can amount to R20 million a time.
SCMB, looking for the best means to minimise and secure its international fund transfer service, teamed up with printing company Lithotec and two of its subsidiaries, Visual Information Systems and Lithotec Consulting, to develop such a system.
Robertse says since the implementation of the technology, the bank has had no successful attempt to perpetrate fraud against it.
"We have successfully managed to clamp down on the fraud attempts that would normally occur. Although we still see between two and three attempts countrywide every week, not one has been successful after we implemented the system two years ago."
The solution to SCMB`s dilemma was to separate the key information between the bank and the corporation. Furthermore, a means had to be developed whereby a standard form, which is required by official regulations, could be secured using printing techniques combined with a sophisticated database.
Oostewald Immink, a consultant at Lithotec Consulting, was instrumental in developing the system. "We developed a system whereby the forms were packaged into secure envelopes using bar codes and personal identity numbers. These are printed by Lithotec and each is supplied with a randomly generated number, that not even we know."
Robertse says each corporation nominates a key person as being their link with the bank and only that person knows the PIN. "This way each party has a separate, but unique piece of information and the transaction can only be completed once they come together. A person attempting a fraud would need to have both sets and this is next to impossible."
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