Strengthening Fraud Prevention in South Africa’s Public Sector
By Jessie Taylor
As South Africa’s economy continues to digitise, fraud has emerged as one of the most pressing threats to public and private institutions. With scams growing more sophisticated and financially damaging, fraud prevention is no longer just a concern for banks and businesses – it is a strategic imperative for government and public sector leaders.
In 2024 alone, the Southern African Fraud Prevention Service (SAFPS) reported that its efforts helped prevent financial losses exceeding R5-billion for member organisations. This figure underscores the threat’s scale and the critical role fraud prevention services play in protecting national economic integrity.
The Evolving Fraud Landscape
According to the SAFPS Annual Report 2024, identity fraud remains the most prevalent method criminals use, accounting for over 50% of reported fraud cases. What is more concerning is the growing complexity of scams, which increasingly exploit digital platforms, personal data breaches, and cyber vulnerabilities to target individuals and organisations. South Africa’s fraud ecosystem has become a lucrative arena for cybercriminals due to low digital literacy, poor security controls in some sectors, and increasing economic desperation. Common scams range from phishing emails and false job offers to fraudulent loans and synthetic identity creation.
The public sector is especially vulnerable. From social grants and pension disbursements to procurement and infrastructure budgets, government departments handle vast sums of money and personal data. A single fraud incident can drain millions from public coffers, erode public trust, and disrupt vital service delivery. Notable breaches in recent years – including the compromise of the Companies and Intellectual Property Commission and attempted scams targeting the Government Employees Pension Fund – have highlighted the need for more resilient fraud management strategies within state institutions.
Founded in 2001, the SAFPS is a not-for-profit body that assists organisations in identifying and combating fraud. While traditionally focused on financial institutions, the organisation’s services and insights are increasingly being adopted across other sectors, including public service. Their Protective Registration feature is among the most effective tools for identity fraud protection. Individuals who suspect their ID has been compromised can register their profile with SAFPS, alerting member organisations (such as banks and credit providers) to take extra precautions when processing applications involving that ID.
Another vital initiative is the Yima platform, launched as a centralised public resource offering tools for scam prevention, reporting, and education. Yima allows users to verify business listings, check banking details before transacting, and access educational materials on scam awareness. This holistic approach empowers citizens to proactively protect themselves — a crucial element in nationwide fraud prevention.
Technology: A Double-edged Sword
The rapid digital transformation in South Africa has expanded access to services but also opened new doors for cyber fraud. Fraudsters now deploy machine learning algorithms to mimic legitimate customer behaviour or create synthetic identities using bits of real and fake data. The same technologies, however, can also be used to counteract fraud. Institutions are increasingly adopting artificial intelligence (AI) and data analytics to detect anomalies, flag suspicious activity, and predict fraudulent behaviour before it causes financial harm.
The public sector can leverage these same capabilities. Fraud detection algorithms that scan procurement databases, grant disbursement systems, or employee payrolls can help identify irregularities early. For example, unusual vendor payments, duplicate beneficiaries, or ID numbers flagged on fraud watchlists can be automatically raised for investigation. A significant barrier to fraud prevention is the lack of awareness among employees and the general public. Many scams continue to succeed not because of technological prowess but due to social engineering and human error. Simple mistakes like clicking on a malicious link, disclosing login details over the phone, or using weak passwords can lead to massive breaches.
To combat this, institutions must invest in regular training for employees. Fraud awareness sessions should be mandatory across all government departments, particularly in finance, procurement, and IT divisions. Public awareness campaigns, in collaboration with SAFPS and similar organisations, can help educate citizens on identifying and avoiding scams. While the private sector is often quick to adopt advanced fraud detection frameworks, the public sector’s response can be hindered by outdated policies, insufficient budgets, or fragmented accountability.
Fraud prevention should be embedded into national governance frameworks. This includes developing and updating fraud risk management policies, integrating fraud response into public finance regulations, and ensuring that consequences for fraudsters — including internal staff — are consistently enforced. An effective governance model involves cross-departmental coordination. For example, data shared between the Department of Home Affairs, the South African Police Service, and SAFPS can create a robust national fraud intelligence network. Authorities can proactively intercept fraud operations by connecting the dots between stolen identities, flagged banking activity, and known fraud rings.
Sources: Daily Maverick | Southern African Fraud Prevention Service
