In 2024, Nedbank prevented account application cyber fraud attempts worth over R7.5 billion, through its fraud risk management strategy and the use of innovative technologies.
This is according to Louis Hennings, head of integrated financial crime risk management at Nedbank,discussing financial crime trends at the recent Southern African Fraud Prevention Service (SAFPS) International Fraud Summit.
Fraud risk is a key operational risk which requires proactive action, said Hennings. Within financial institutions, managing fraud risk should be a shared responsibility that needs to move from being a reactive defence to focus on strategic prevention.
Nedbank, he noted, proactively manages financial crime risk, rather than taking a reactive crisis management approach. Through effective advanced intelligence and tech-focused financial crime risk management, the bank uses a strategic approach to protect clients by proactively identifying, analysing and mitigating integrated financial crime risks, he explained.
This approach to cyber fraud prevention led to Nedbank thwarting billions of rands in application fraud attempts – a form of deception where criminals misrepresent information or use stolen personal data in application processes; for example, to open a new bank account or apply for credit cards.
“We see SAFPS as the biggest return on investment in this organisation, with our annual membership fee giving us a return on investment of over 1 000%.
“In 2024, Nedbank prevented application fraud incidents worth over R7.5 billion. So far in 2025, we are standing on R4.7 billion in prevention value. These are instances where there is submission of false pay slips, false bank statements, false IDs, etc.
“Our losses in application fraud were approximately less than R50 million last year. SAFPS has contributed to 30% of that prevention.
“We all know that fraud risk management can only be successful if there's collaboration. Fraudsters have the same meetings we do. For every 100 methods that we use to try and implement or prevent fraud, criminals have 101 ways to get past it. Unfortunately, they are a bit more progressive and dynamic than big corporates.”
Nedbank’s integrated financial crime risk management unit’s main objective is to understand fraud risk and align fraud management with business expectations – to ensure as little friction as possible for clients, he added.
The bank uses several technologies to prevent application fraud, including artificial intelligence (AI), data analytics, real-time transaction monitoring, machine learning and authentication measures.
According to research firm Market and Markets, the fraud detection and prevention market is projected to grow from $28.8 billion in 2024, to $63.2 billion by 2029 at a compound annual growth rate of 17% during the forecast period.
The proliferation of mobile devices and digital payment methods have created new opportunities for fraudsters to exploit vulnerabilities, Hennings pointed out.
Challenges in fraud risk management include navigating tactics and trends such as AI-generated identities, phishing and balancing data privacy with information-sharing within the organisation, he said.
“It’s important to enhance the fraud risk culture with staff training and awareness, and encourage reporting without fear, as well as embedding fraud risk into daily operations.”
There are two types of fraud losses that are common within the financial sector, and these include “expected losses” as well as “unexpected losses”, he noted.
“Expected losses are anticipated through historical data and built into budgeting; for example, minor credit card fraud which regularly occurs. Unexpected losses include larger, unanticipated losses due to control failures or novel schemes; for example, major cyber fraud or targeted attacks. It’s important to conduct scenario analysis in order to stress-test the organisation's fraud resilience.”
Organisations’ governance and compliance processes must continuously evolve with emerging threats, and fraud risk management must always be embedded into daily operations, he concluded.
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