South Africans who use banking apps are being urged to exercise greater caution when approving payment requests, as fraudsters increasingly rely on manipulating customers into authorising transactions rather than hacking bank accounts.
Discovery Bank has issued a fraud alert warning that criminals can exploit a lost or stolen smartphone or bank card within minutes if customers do not act quickly.
The bank advised customers to carefully review all payment and card purchase requests before approving them, stressing that banks will never ask clients to authorise the reversal of a fraudulent transaction.
"Always check payment and card purchase requests before approving them. Banks will never ask you to approve a reversal of a fraudulent transaction," the bank said.
Customers who lose their phone or bank card are encouraged to immediately block their card through their banking app, where possible, and contact their bank's fraud department without delay.
"If you have access to your banking app, block your card, then contact our fraud team straight away. Fraudsters can misuse lost cards and devices within minutes," Discovery Bank warned.
The warning comes amid growing concern over increasingly sophisticated scams targeting bank customers instead of banking systems.
According to fraud prevention company BioCatch, South African banks are experiencing a significant rise in fraud attempts. Its latest research found that 85% of banking executives have reported an increase in fraud attacks, while 79% said financial losses linked to fraud are growing.
The study also found that 81% of financial institutions estimate they lose more than $5 million (approximately R82 million) annually to fraud.
BioCatch Director of Global Advisory Jonathan Frost said criminals are changing their tactics because banks have significantly improved their ability to stop traditional account takeover fraud.
"I think we are facing a challenge, not just in South Africa, but in pretty much all developed markets," Frost said.
"The banks have done such a good job at preventing unauthorised fraud that, unfortunately, customers have been put very solidly in the crosshairs of fraudsters."
Instead of attempting to breach banking systems, scammers are increasingly persuading victims to transfer money themselves or approve fraudulent transactions through legitimate banking apps.
"The security around bank accounts is generally so good now that the only way you can get the money out of the account is to effectively manipulate the customer into sending it on your behalf," Frost explained.
He warned that the rapid growth of digital banking and instant payment services has created more opportunities for criminals to pressure customers into approving transactions before they have time to verify them.
Frost also cautioned that the threat is expected to intensify as fraudsters increasingly adopt artificial intelligence to create more convincing scams.
"It looks like it will probably worsen before it gets better. We're now entering a new phase of an evolving threat environment," he said.
Banks are responding by strengthening fraud detection systems and expanding customer awareness campaigns.
GoTymeBank Head of Fraud Bonolo Sebolai said modern banking security extends beyond passwords and one-time PINs, urging customers to remain vigilant.
She advised customers to download banking apps only from official app stores, ignore suspicious calls or messages by contacting their bank directly, and take immediate action if they believe their phone or banking profile has been compromised.
The warning follows a sharp increase in digital banking fraud complaints received by the National Financial Ombud Scheme (NFO). Between January and May this year, the organisation recorded 2,483 complaints, up 73% from the 1,436 cases reported during the same period in 2024.
The NFO has also raised concerns about the misuse of virtual banking cards after one victim reportedly lost R500,000.
Lead Ombud for Banking and Credit Nerosha Maseti said virtual cards remain a secure payment method but can be abused if fraudsters gain access to a customer's digital banking profile through phishing, smishing or vishing scams.
"Fraudsters can create virtual cards and then use the virtual card credentials to perform transactions once gaining access to a customer's digital banking profile after customers have shared OTPs or approved authentication prompts," Maseti said.
Financial institutions continue to urge customers to verify every payment request carefully, never share one-time PINs or authentication codes, and report suspicious activity immediately to minimise the risk of falling victim to increasingly sophisticated banking scams.