The financial services sector is experiencing ever-increasing incidences of security and fraud attacks across various business areas.
So says Gontse Tsatsi, Gijima's industry consultant for financial services, who points out that, in SA, each of the four major banks lose between R500 million and R800 million per year to fraud, and this equates to a minimum figure of R2 billion per year.
“This figure excludes tier one and two banks, insurers and fund managers, together with the fact that financial services providers do not publicise breaches. Out of this, 15% takes place through external incidents, such as ATM bombings,” Tsatsi explains.
However, he says, since banking is conducted on the foundation of customer trust, most incidents are not reported.
He believes financial service organisations are on the top of the list for criminals because they are the primary fund managers. “This is their core business while other industries make money off other core businesses.
Giving examples of the organisations that have been affected recently, Tsatsi says the South African Post Bank lost R42 million to cyber crime this year.
“In this case, insiders' passwords were exploited to transfer funds. Media reports say the heist took place from 1 to 3 January, while Post Bank was closed for business. The cash was withdrawn from the mule accounts using ATMs in Gauteng, the Free State and KwaZulu-Natal over three days,” he explains.
He also reveals that the R27.3 million loss FNB reported in 2012, occurred in 2009.
According to Tsatsi, corporate SA is losing an estimated R150 billion annually to insider fraud, while EFT fraud accounts for at least R1 billion.
Says Tsatsi, short-term insurance lost over R6 billion to fraud in 2011; life insurance over R3.5 billion; and medical insurance over R6.5 billion.
For most of these security breaches, Tsatsi blames a lack of regular reviews on access rights; weak password management and user authentication; as well as difference in levels of security across varying locations, business units, products/offerings, etc.
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