Digital adoption on the rise for major banks in the country – FSCA report

For more than a decade, the strategic focus of South Africa’s largest banks has been digitisation and customer self-service, according to the Financial Sector Conduct Authority (FSCA) Financial Sector Outlook Study.

The report showed that the banking sphere in the country is undergoing a transformation as transactions are performed via digital channels such as online platforms and banking apps.

These changes were brought on by:

• An increase in competition from newly launched digital banks like Discovery Bank and TymeBank
• Technology-enabled start-ups
• A growing number of retailers offering financial services
• Credit products
• Lower banking fees
• The introduction of varying models of distribution, and
• Innovative value propositions for customers

The change also stems from developed payment options by banks as well as the implementation of next-generation ATMs as a strategy to decrease consumers’ branch dependency.

“The Covid-19 pandemic further accelerated the rate at which businesses and consumers adopted technology for transactions, particularly in the payments space where many customers preferred to transact with card over cash; and tap-and-go card transactions increased significantly.”

However, the move to digital banking practices may pose a risk to customers.

The report said that there are increased risks in regards to digital banking due to a rise of cybercrime in the banking industry of South Africa in the past few years.

The Covid-19 pandemic saw a rise in technical vulnerabilities related to network security and the uptake of digital banking channels by individuals as they were limited in their ability to visit a physical branch.

Here are some tips to prevent bank fraud:

• Don’t click on emails from an unknown email address
• Avoid filling in personal information on suspicious sites
• Keep the details of your online banking username and password safe
• Use a two factor authentication system to access your online banking account
• If you notice suspicious activity on your banking channels, inform your bank immediately

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