Fraud has been the most frequently recorded type of financial crime in South Africa – accounting for 26% according to an analysis by LSEG Risk Intelligence.
The research showed that control or regulation violations and theft and embezzlement took second and third spots with 13% and 12% respectively.
Across the continent, South Africa was second for global recorded fraud volume with 5 114 records (0,94% of the global total) to Nigeria’s 12 038 (2,21%).
South Africa follows the global trend of fraud becoming the dominant form of financial crime. According to a World-Check analysis of 545 000 fraud records across 224 countries, fraud accounted for 37,3% of reports followed by control or regulation violations on 12%.
The US had the most reported fraud with just over a quarter (26%) of the global total, followed by India on 11% and China on 8%.
On a city level, Mumbai was responsible for the most reported frauds with 22 601, followed by Buenos Aires on 20 625 and New Delhi, some way behind with 8 569.
Demographic data shows that 62% of all frauds were perpetrated by men, 20% by women and 16% by an entity. The most common age group for perpetrators is the 50s and 60s, at 43%, followed by 30s and 40s slightly behind on 42%, 70 to 80s on 10%, and 20s and below on 5%.
Over half of offenders didn’t act alone, with 52% perpetrating fraud with associates.
Politically-exposed people were responsible for 10% of fraud cases, with non-PEPs taking the lion’s share of 90%.
The research uncovered the extent to which financial crime is becoming increasingly integrated with criminals exploiting the synergies between various types such as money laundering and corruption to maximise profits and minimise detection.
Ruth Helena Alves da Mota, content partnership manager at LSEG Risk Intelligence, comments: “Fraud is becoming the lynchpin of the entire global financial crime ecosystem and South Africa hasn’t escaped this global phenomenon.
“It provides a relatively easy path to support a whole host of more serious illicit activity as the volume of our online activity provides criminals with a multitude of opportunities to target victims.
“This convergence of crime poses a significant challenge to regulators, financial institutions, and corporations, requiring a comprehensive and nuanced understanding of the risks involved. This also necessitates increase private-public partnering such as information sharing across borders to meet these threats.”
Kishor Harri, manager of monitoring and analysis at the Financial Intelligence Centre of South Africa, comments: “The South African Anti-Money Laundering Integrated Task Force (SAMLIT), a financial information sharing partnership, established by the Financial Intelligence Centre in 2019 continues to strengthen efforts to combat serious financial crime. SAMLIT is supporting law enforcement efforts in their investigations of serious financial crime through tactical operation groups. In addition, the public-private partnership conducts research through expert working groups to improve the detection and reporting of serious financial crime in South Africa.”