Identity theft in the financial industry imperils South Africans

Identity theft in South Africa continues to rise despite many warnings and precautions to protect clients. Every two seconds, someone's identity is stolen somewhere in the world, according to reports.

Recent estimates from the National Council on Identity Theft Protection in the United States indicate that identity theft will cost Americans around $6 billion by 2021. The Federal Trade Commission received 5,7 million fraud and identity theft complaints in the same year, with identity theft accounting for a quarter of these complaints.


It is estimated that identity theft costs the South African economy more than R1.5 billion annually. Almost everyone is affected by identity theft at some time, whether directly or indirectly.

The rising trend

Even before the COVID-19 outbreak drove individuals online during early severe lockdowns, digital transactions were increasing. Now that the health effects of the coronavirus have abated, there has been an upsurge in the use of online platforms to shop, bank, and do business, with the value of online transactions in the billions and rising.


Fraudsters, hackers, and organized criminal syndicates have increased their attempts to get access to the personal information and identities of their victims.


Identity theft is caused by more than just customer error. There are certainly people and criminal organizations that specifically target individuals, but there are also algorithms and bots that seek to exploit vulnerabilities.


Switching from a physical to a digital identity has several advantages, including efficiency and inclusivity. According to studies, a strong digital identity may assist with, among other things, increased user management of data, privacy protection, online transaction security, and reduced reluctance to trade online.


Advanced technology

Financial institutions are fast recognizing the importance of current biometric verification technologies in safeguarding themselves and their clients from identity theft, money laundering fraud, regulatory fines, and reputational damage.

Less-savvy consumers and bank customers have resisted using biometrics to access online services. When clients learn that biometric onboarding provides an additional layer of security against fraud and identity theft, they are substantially more willing to adopt the practice.

When consumers understood that biometric verification technology enhanced their cyber security, the number of customers using it at one financial institution increased by 100 percent.


Safety and security

Given the global focus on anti-money laundering and attempts to prevent illicit financing, onboarding in financial services and wealth management is becoming more important. The South African financial sector, particularly the banking industry, emphasizes biometric verification for safety and security rather than as a formality.


Businesses are using dependable biometric solutions. In the United States, M2SYS is a major supplier of accurate and cost-effective biometric turnkey systems.


Governments and organizations who have not yet implemented biometric digital identity verification confront a growing demand and obligation to do so. There is a worldwide drive to embrace this transformative technology, in addition to a local one. Verified proof of identity will become increasingly prevalent in online safety and security since it safeguards the integrity of organizations, individuals, and financial transactions.

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