In SA’s financial services and banking sectors, document fraud has emerged as a silent but devastating threat. From falsified bank statements to doctored proof of residence, fraudulent documentation is costing banks billions and eroding trust across the system.
While the public often associates banking fraud with cybercrime or card cloning, the manipulation of everyday documents is proving just as dangerous, and far more insidious.
Capitec Bank, one of SA’s largest retail banks, has faced this challenge head-on by partnering with SkyQR, a South African company specialising in document verification technology.
“Document fraud has always been prevalent in our industry,” says Wim de Bruyn, Capitec CIO. “We used to receive a large number of requests from external banks to manually validate Capitec documents. It required significant resources and manpower.”
State of fraud in SA
South African banks remain particularly vulnerable to document fraud due to the widespread use of manual verification processes and the accessibility of digital forgery tools.
Fraudsters can easily manipulate PDFs, edit scanned documents and forge signatures using basic software. The result is a flood of fake income statements, doctored utility bills and counterfeit bank letters entering the system.
For every rand lost to fraud, financial institutions incur an average cost of R4.52. That means a R1m fraud incident could cost a bank over R4.5m in total losses and operational fallout
— 2023 LexisNexis True Cost of Fraud Study
When a fraudulent document slips through, the consequences ripple outward. A bank may issue a loan based on false information, leading to bad debt. The customer may face legal action or credit blacklisting. And the broader financial system absorbs the cost through higher interest rates, increased compliance burdens, and diminished trust.
According to the South African Banking Risk Information Centre, fraudulent applications for vehicle asset finance more than doubled from 2022 to 2023, with potential losses reaching R13.5bn. The 2023 LexisNexis True Cost of Fraud Study found that for every rand lost to fraud, financial institutions incur an average cost of R4.52. That means a R1m fraud incident could cost a bank over R4.5m in total losses and operational fallout.
Combatting the risk
To combat this growing risk, Capitec partnered with SkyQR in 2020.
SkyQR’s technology embeds encrypted QR codes into key banking documents such as bank statements, account confirmations, and proof of payment. These codes store critical data about the document, including account numbers, balances, and customer details.
“When someone receives a document, they can scan the QR code using our app to decrypt it and compare the embedded data with the visible information,” says Kapish Soma, SkyQR MD. “If there’s a discrepancy, it means the document has been tampered with.”
This simple yet powerful mechanism has transformed Capitec’s fraud prevention strategy. Using SkyQR’s technology, Capitec has issued over 590-million QR-coded documents and facilitated more than 2.5-million scans.
“SkyQR acts as a frontline fraud prevention mechanism,” says De Bruyn. “Branch efficiency has significantly increased due to fewer fraud-related queries. Less manual verification means we can redirect manpower to larger issues.”
Realising ROI
Across SkyQR’s client base, over 85,000 fraudulent documents have been detected in the past five years, at an average of 2,500 per month. The estimated savings for the financial industry is more than R2.5bn.
For Capitec, the benefits extend beyond cost savings. The bank has seen a marked reduction in reputational risk and improved customer experience. “The fraud has shifted to other banks. That’s the power of proactive prevention,” says Soma.
With SkyQR, Capitec has moved from reactive to proactive fraud prevention. And that shift is making all the difference
— Wim de Bruyn, Capitec CIO
Microfinanciers using SkyQR report savings of R1.5m per month, while vehicle financiers save up to R30m monthly. As fraudsters become more sophisticated, the need for secure, automated verification tools becomes non-negotiable. However, in scaling across the financial sector, Soma says many banks don’t always see the direct financial implications until fraud hits.
Pro-active fraud prevention is critical for banks
Document fraud is no longer a fringe issue: it’s a systemic risk threatening the integrity of SA’s banking sector. Capitec’s partnership with SkyQR offers a blueprint for how technology can be used to protect institutions, customers, and the economy at large.
As De Bruyn puts it: “We’ve moved from reactive to proactive fraud prevention. And that shift is making all the difference.”
As SA’s financial institutions grapple with rising fraud risks, SkyQR shows that innovation, when applied strategically, can deliver measurable impact. It’s not just about saving money, it’s about restoring trust in a system that millions rely on every day.
This article was sponsored by SkyQR.
