The assessment of the impact of cyberfraud in the South African banking industry

Abstract

Purpose: The purpose of this study is to assess the impact of cyberfraud in the South African banks with the aim to provide recommendations to effectively mitigate it. Design/methodology/approach: The study uses a qualitative approach involving the use of structured questionnaires. The questionnaires were made available to the staff of 17 licensed banks in South Africa who deal with management, operation, administration and banking services. Two hypotheses were formulated and non-parametric statistical analyses involving the use of Chi-square test, Fischer’s Exact test and Spearman’s correlation were carried out. The two hypotheses formulated were tested to draw a conclusion. Findings: The results obtained indicate that the impact of cyberfraud in the South African banking industry is highly significant and has affected the reputation of some of the banks. This calls for the need to review the diverse ways of curbing cyberfraud to lessen their impact and that of associated fraud risks on the banking operation. Practical implications: This study provides an analysis on the relationship cyberfraud occurrences and the reputation of South African banks. The implementation of the recommendations may reinforce the existing security measures in the fight against cyberfraud. Originality/value: The novelty of this study lies in the fact that the assessment of the impact of cyberfraud on the banking industry in South Africa has not been sufficiently highlighted by the existing literature.