With digitalisation reshaping the insurance and financial services industry in Africa, the threat of fraud has evolved in terms of its magnitude and complexity. 

While institutions race to digitise procedures and embrace artificial intelligence (AI), the World Economic Forum’s 2024 Global Cybersecurity Outlook shared that fraudsters employ online platforms to target the most vulnerable: micro-enterprises, families and individuals.

Fraud is not about stolen cash but stolen trust, peace of mind and dignity. In Namibia, where families work to create financial security, the emotional impact of fraud can be crushing. Victims feel shock, denial, shame and fear. Too many are afraid to even report it. 

Today’s scammers are more sophisticated, using impersonation, identity theft and social engineering to trick even the most cautious.

The rise in the use of digital onboarding within insurance and the associated financial sector has opened new windows to fraud. According to the Insurance Information Institute’s 2024 Identity Theft and Cybercrime Statistics, identity theft, phishing and spoofing (when cybercriminals pretend to be someone or something else to gain access, steal data or spread malware) by SMS are on the rise. 

Students, seniors and entrepreneurs are the most susceptible. Misplaced trust in a fraudulent intermediary can lead to unauthorised access to banking profiles, theft of premiums or abuse of identity.

According to recent global risk fraud management trends, cybersecurity has become a top board-level concern in 85% of organisations (World Economic Forum – Global Cybersecurity Outlook 2024), yet over half admit to having weaknesses in their fraud prevention systems.

In addition, 78% recognise digital dissemination as a significant risk, especially with the poor onboarding processes being exploited by fraudsters.

Although institutions are adopting AI and analytics, real-time fraud detection remains an area of work in progress.

Digital disruption in Africa presents both a threat and an opportunity. Limited digital literacy, particularly among frontline workers and consumers, leaves many more vulnerable to scams. Internal audit leaders highlight the urgent need to strengthen systems and prioritise proactive fraud education. 

However, the battle against fraud is more than fraud departments and firewalls. It is about responsibility, awareness and compassion. 

Financial institutions must do more than comply with the law. They must educate customers, issue timely warnings, collaborate with other industry partners and players, and respond with sensitivity when fraud occurs. Blaming victims only worsens the trauma. Fraud is not someone else’s problem. It has become everyone’s problem. Speak up when something is not right. Share your story. Learn the red flags. 

Safeguarding our people is as important as safeguarding our money. Together, in vigilance and knowledge, we can have a more resilient and fraud-aware financial system.

*Ujandja Zatjirua, Assurance and Group Forensic Services Manager, Corporate Governance, Old Mutual Namibia.