Mobile operators Cell C, MTN and Telkom have backed a new antifraud system by global telecom body GSMA, aimed at protecting SA’s 47-million cellphone users better.
Reported incidents of digital banking fraud surged 24% in 2022, according to a report published by the SA Banking Risk Information Centre (Sabric). Cybercriminals made off with more than R740m, primarily through fraud related to banking applications and online banking.
SA’s mobile operators will now be able to implement new number verification and SIM swap application program interfaces (APIs), GSMA said. This is part of the worldwide Open Gateway initiative, which aims to combat fraud and digital identity theft in sectors including banking, finance, insurance, and retail.
Altogether 42 mobile operator groups worldwide, representing 237 mobile networks and 65% of global connections, are already part of the initiative.
GSMA said an alarming surge in digital banking fraud in SA had given rise to an effort to standardise APIs by mobile network operators (MNOs), presenting “a promising avenue for mitigating such threats”.
An API acts as a go-between or messenger in different software programs, allowing them to talk to each other and exchange data or functionality.
The standardisation of APIs allows developers to implement number verification of a user’s mobile number by providing the next generation of strong authentication and user experience. GSMA says this is a simple evolution for business that use mobile numbers and SMS one-time passwords (OTPs). Instead of relying on SMS, the number verification can be seamlessly and automatically activated to verify a user’s identity.
The SIM swap system will check whether a given phone number has recently changed SIM cards, helping to prevent account takeover attacks whereby fraudsters take control of an account holder’s SIM card using social engineering techniques and stolen personal data.
Enhance measures
With the new technology a financial institution can, for example, check at the time of a transaction whether the relationship between the customer’s phone number and SIM card has recently been changed, helping them to decide whether to approve the transaction.
By leveraging their infrastructure and expertise, MNOs can enhance security measures within banking applications and online banking platforms. They are also able to implement robust fraud detection and prevention mechanisms, bolstering the overall resilience of digital banking systems against cyber threats.
GSMA said its platform would be available to all mobile commerce and financial institutions and developers to create new services to fight digital fraud.
“Banking fraud is a growing threat in SA, and mobile network operators are strategically placed to work with developers to help banks, financial institutions and commerce providers mitigate the risk and protect their customers,” said to Angela Wamola, head of Sub-Saharan Africa at GSMA.
“The availability of the two APIs to SA operators will equip enterprises with additional means of verifying that their customers are who they say they are and protecting them against identity theft, all while maintaining the user experience — and GSMA’s Open Gateway provides developers with a single integration that works across operators.”
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