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<div class="content-wrap text-center"><div class="sub-title m-b-10">LATEST ARTICLES</div><h5 class="title">What's in the news</h5></div>

<p><cite>Sub 5-minute read </cite></p>

<h2>The Rise in Economic Crime and the Decay of Trust </h2>

<p>Trust – understood as “our willingness to be vulnerable to the actions of others because we believe they have good intentions and will behave well towards us” – is the fabric that binds societies and economies together and ensures they can function well. The Covid-19 pandemic demanded more societal trust that ever before as peopleand businesses came together to overcome mutual challenges. </p>

<p>However, this demand for trust between individuals, business, and project stakeholders was often betrayed as criminals exploited people’s vulnerabilities for personal gain. Economic crime exploded during the pandemic and types of social engineering fraud reached record levels. This sharp rise of economic crime during the pandemic holds key lessons for combatting such crimes in the future. If we want to foster a stronger, more trusting post pandemic economy, learning from Covid-19 is not an option; it is a necessity. </p>

<h2>Identity Fraud, Phishing Scams, and the Abuse of Vulnerability</h2>

<p>The speed, unpredictability and consequences of the pandemic profoundly shook many people’s sense of safety and economic security. As noted by SABRIC’s 2020 <a href="https://www.sabric.co.za/media/20oouwbg/sabric-annual-crime-stats-2020.pdf">report</a> on cybercrime, “social vulnerabilities resulting from fear and confusion caused by the pandemic and adjusting to lockdowns were exploited by criminals”. </p>

<p>Phishing scams – a form of social engineering that tricks people into handing over sensitive information by exploiting the trust people place in authority – spiked to record levels during the pandemic. As cybersecurity systems become uncrackable, this exploitation of trust is becoming more profitable – social engineering has become the primary method employed by criminals when targeting victims across digital channels.</p>

<p>SIM swap fraud, which is nearly always committed by phishing scams, increased by 91.35% in 2020 compared to 2019. In addition, over 92% of all mobile banking fraud was committed using SIM swapping, representing losses of over R42 million. Due diligence services that can detect incidents of SIM card swapping, such as ThisIsMe’s SimSwap service, are central to curbing this threat.</p>

<p>Shockingly, Business Email Compromise (BEC) scams saw a 30% increase in the first 100 days of the pandemic. The chaos created by the near-instantaneous shift to online communications at the start of the pandemic – combined with the lack of verified identities online – made it easy for fraudsters to exploit the disarray and phish for information using (BEC) scams. When conducting BEC scams, fraudsters impersonate trusted authority or business partners and send fraudulent emails that are designed to trick employees into giving away sensitive information or sending the criminals money. In the US alone during 2020, the FBI reported adjusted losses from BEC in excess of $1.8 billion.</p>

<p>Social engineering fraud is only possible in the absence of verified identities; consequentially, verified identitiesare also the solution to such fraud. To find out how ThisIsMe can help you rebuild trust with verified identities, contact our team here. </p>

<h2>Business Partner Fraud – Vendor Due Diligence and Supply Chain Risk Management </h2>

<p>As the world battled Covid-19, criminals exploited the immense demand for PPE and other medical supplies. Mirroring global trends, the United States reported that non-delivery fraud, price gouging, securities fraud, misbranded products and identity fraud were alarmingly common at the height of the pandemic.</p>

<p>In South Africa, <a href="https://www.youtube.com/watch?v=I8ZkpS-xMG4&amp;ab_channel=CarteBlanche">investigations</a> revealed how, during the height of the pandemic, fraudulent buyers fooled insufficient due diligence checks and scammed PPE suppliers out of millions of Rands of stock. </p>

<p>These examples of business partner fraud are not isolated. PwC conducted a survey of 245 South Africanbusiness respondents (174 of which were C-Suite). Respondents were asked to identify the external perpetrator responsible for the most disruptive economic crime incident in the last two years. 18% of respondents cited vendor/supplier, 15% cited joint venture/alliance partner, and 13% cited consultant/advisor. Combined, these three groups – all categorized as business partners of some form – were responsible for 46% of the most disruptive economic crimes against the responding businesses. </p>

<p>Shockingly, however, 24% of respondents to PwC’s report had no third-party due diligence or risk monitoring program whatsoever, even though 20% of respondents cited vendors/suppliers as the perpetrator of their most disruptive financial crime incident. If businesses want to operate in an environment free from crippling distrust, this discrepancy must be addressed, and comprehensive vendor due diligence procedures adopted. </p>

<h2>Fraud Risk Management with Enhanced Due Diligence </h2>

<p>Fraud committed by a business partner is a devastating event. Of all South African respondents to PwC’s survey, 1/3 cited distrust as being the most significant emotional impact of such incidents. Of those organizations that had reported experiencing economic crime, nearly one in five South African respondents cited that they had also been accused of committing an economic crime. When assessing the likelihood of who would point the finger, 44% were competitors, 43% were employees, and 31% were customers. Only in a quarter of incidents did a regulator make the accusation. This growing culture of finger pointing highlights the damaging effects that distrust (caused by economic crime) has on an economy.</p>

<p>The years following the pandemic will be characterized by economies rebuilding and recouping the losses suffered during the pandemic. However, by undermining the faith we place in our transactions, pervasive fraud sows distrust and makes us shy away from investment – a pattern that has been proven to slow economic development. Restoring this trust is therefore crucial if we want to foster a strong economy in which people feel empowered to transact without suspicion or the fear of debilitating losses from economic crime.  </p>

<p>To manage the risks of fraud, enhanced due diligence procedures must verify the identities of business partners to validate company registration details and the identities of the company directors.</p>

<h2>Restoring Trust with Identity Verification Services </h2>

<p>Trust, which is so fundamental to the wellbeing of societies, economies and nations, has been in decline for years. We are more suspicious of businesses, government and each other than ever before. The share of the global population that felt like most people could be trusted has fallen by 20% over the last 15 years.</p>

<p>“Virtually every commercial transaction has within itself an element of trust, certainly any transaction conducted over a period of time” – Kenneth Arrow, Nobel Laureate for Economics.</p>

<p>By undermining the faith we place in our transactions, pervasive fraud sows distrust and makes us shy away from investment – a pattern that has been proven to slow economic development. Restoring this trust is therefore crucial if we want to foster a strong economy in which people feel empowered to transact without suspicion or the fear of debilitating losses from economic crime.  </p>

<p>Although it is essential to start rebuilding this trust, it is naïve to simply ask people to trust one another. The risk of loss is too high. Trust must be rebuilt on verifiable identities that can offer peace of mind by affirming the integrity of those we do business with. </p>

<p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team here.</p>


As we rebuild after the pandemic, identity verification, enhanced due diligence and supply chain risk management are crucial to fight economic crime.

How to Fight Economic Crime with Enhanced Due Diligence and KYC

<p>PwC’s 2020 <a href="https://www.pwc.co.za/en/publications/global-economic-crime-survey.html">Global Economic Crime and Fraud Survey</a> provided valuable insight into the changing (and emerging) patterns of South Africa’s economic crime landscape.</p><p>South Africa has long been a hotspot for economic crime. Since 2009, the country’s incident rate has been, on average, 27 percentage points higher than the global average. In 2020, South Africa was tied with China for the country with the highest reported incident rate of economic crime. Interestingly, South Africa’s level of fraud awareness far outstrips the global standard: 73% of South Africans respondents indicated a high or extensive knowledge, in contrast to only 65% of global respondents.<sup>1</sup></p><h2>Less Incidents, Yet Higher Losses</h2><p>Despite South African’s high awareness of economic crime, total losses have increased by 4%. Between 2018 and 2020, South Africa reported total losses from economic crime in excess of $1.7 billion (more than 25 billion South African Rand). 7% of South African incidents reported losses of between $50 million and $100 million, while 4% reported losses of more than $100 million.</p><p>Although these loses are high, such numbers are often hard to quantify and other losses such as missed opportunities, reputational damage, loss of market position, rife distrust, and impact on morale and productivity are nearly impossible to measure. <sup>2</sup></p><h2>Customer Fraud and New Types of Financial Crime</h2><p>For the first time ever, Customer Fraud was the most prominent type of economic crime listed in PwC’s report – 47% of South African respondents had experienced it in the last 24 month, compared to 34% of global respondents. Alarmingly, customer fraud was only introduced into the survey in 2018 yet is now the most common form of economic crime.</p><p>Customer fraud was also foretold to be the 3<sup>rd</sup> most disruptive economic crime for the next two years. Respondents were asked to predict the most disruptive economic crimes facing their organizations over the next 24 months and external threats were three out of the top four responses – 19% cited bribery and corruption (1<sup>st</sup>), 14% cited customer fraud (3<sup>rd</sup>), and 11% cited cybercrime (4<sup>th</sup>). Accounting/financial statement fraud placed 2<sup>nd</sup>, although this is an exclusively internal threat.</p><p>Although daunting, the issue of customer fraud is one that can be addressed. While other types of economic crime such as bribery and corruption are far harder to tackle, customer fraud is one where “dedicated resources, robust processes and technology have proven effective in prevention”.<sup>3</sup> Customer due diligence checks such as KYC and credit reporting hold the key to trusted transactions.</p><h2>Outsourcing, Vendor Fraud and Operational Risk</h2><p>In efforts to cut costs, there has been a global trend towards the outsourcing of business functions to third-party contractors. Although this approach has the benefit of being cheaper, it also presents new threats.</p><p>Respondents to a PwC survey were asked to identify the external perpetrator responsible for the most disruptive economic crime incident in the last two years. 18% of respondents cited vendor/supplier, 15% cited joint venture/alliance partner, and 13% cited consultant/advisor. Combined, these three groups – all categorized as business partners of some form – were responsible for 46% of the most disruptive economic crimes against the responding businesses.</p><p>Fraud by business partners, suppliers, vendors, and consultants can be devastating. Investigations have uncovered how South African businesses have routinely been scammed out of hundreds of thousands of Rands after fraudulent suppliers secured credit by impersonating impersonated legitimate businesses and faking credit checks. Intensive due diligence measures – such as ThisIsMe’s Company Credit Check and Company Sanction Check – must form part of a larger business strategy to manage risk and ensure transactional security.</p><h2>Distrust – The Damage of Economic Crime</h2><p>Although the financial losses from financial crime are immediate and devastating for the affected business, economic crime has another lingering and invisible effect: distrust. 1/3 South Africans cited distrust as being the most significant emotional impact of incidents of economic crime,<sup>4</sup> which is mirrored by the fact that we are more suspicious of businesses, government and each other than ever before.<sup>5</sup>&nbsp;"The share of the global population that felt like most people could be trusted has fallen by 20% over the last 15 years.<sup>6</sup>"</p><p>This pervasive issue undermines the entire economy. A lack of trust can make some longer-term investments appear too risky as businesses become reluctant to invest their trust in project stakeholders like suppliers, consultants, and contractors. Businesses therefore default to ‘safer’ short-term investments, but such investments handicap growth by only being able to generate small and incremental gains over short timeframes. Distrust <i>slows</i> economic development. <sup>7</sup></p><p>Restoring this trust is therefore crucial if we want to foster a strong economy in which people feel empowered to transact without suspicion or the fear of debilitating losses from economic crime.  Although it is essential to start rebuilding this trust, it is naïve to simply ask people to trust one another. The risk of loss is too high. Trust must be rebuilt on verifiable identities that can offer peace of mind by affirming the integrity of those we do business with.</p><h2>Enhanced Due Diligence and KYC Services</h2><p>The explosion of customer fraud – combined with the complex threat landscape created by the growing popularity of outsourcing – places serious emphasis on the need for proper due diligence procedures.</p><p>Shockingly, however, 24% of respondents to PwC’s report had no third-party due diligence or risk monitoring program whatsoever, even though 20% of respondents cited vendors/suppliers as the perpetrator of their most disruptive incident of financial crime. This discrepancy must be addressed if businesses wish to operate in an environment free from crippling distrust.</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team here.</p><ol>	<li><cite><small>PwC. Global Economic Crime and Fraud Survey. 2020.</small></cite></li>	<li><cite><small>PwC. Global Economic Crime and Fraud Survey. 2020.</small></cite></li>	<li><cite><small>PwC. Global Economic Crime and Fraud Survey. 2020.</small></cite></li>	<li><cite><small>PwC. Global Economic Crime and Fraud Survey. 2020.</small></cite></li>	<li><cite><small>Edelman Trust Barometer 2021.</small></cite></li>	<li><cite><small>Deloitte. The link between trust and economic prosperity.</small></cite></li>	<li><cite><small>Conal Smith. “Trust and Total Factor Productivity: What Do We Know About Effect Size and Causal Pathways?”. 2020.</small></cite></li></ol>

Examining how the due diligence process can reduce operational risk and fight South Africa’s rise in economic crime, vendor fraud and customer fraud

SA’s Alarming Rise in Customer, Vendor Fraud and Economic Crime

<p><em>Sub 5-minute read </em></p>

<p>Since its enactment in 2016, the EU’s General Data Protection Regulation (GDPR) has shaped global norms and values – nearly all ensuing national data protection laws have been modelled off it. South Africa’s Protection of Personal Information Act (POPIA) was no exception and its enactment brought South Africa on par with global standards. </p>

<p>However, China’s new Personal Information Protection Law (PIPL) is noteworthy. Its approach is not only at odds with the norms established by the GDPR; it also explicitly states China’s desire to shape global standardsfor data protection. Contrasting POPIA and the PIPL highlights how political contexts shape legislation andreveals how data protection legislation may look in the future. </p>

<h2>How Data Privacy Fosters Trust – The Tangible Economic Benefits </h2>

<p>Both laws should be applauded for requiring the explicit consent of the individual before their personal data can be processed. These requirements for the acquisition of data subject consent – a staple in other leading privacy bills like the GDPR – is a mechanism designed to empower individuals to make informed decisions about howand when their personal information is collected and processed. This fosters digital trust. </p>

<p>Digital trust has become a major concern for businesses and consumers alike. For stakeholders and customers, it relates to whether they can trust that their data is secure, and if their personal information is correct, safe, and private. In an <a href="https://www2.deloitte.com/us/en/insights/topics/digital-transformation/the-importance-of-digital-trust-qa.html?id=us:2el:3dp:wsjspon:awa:WSJCMO:2022:WSJFY22">interview</a> with Deloitte, the director of MIT’s Connection Science laboratory Sandy Pentlandexplained the value of transparency when dealing with personal information.</p>

<p>“I’m going to deliver this service to you, and then without really making it clear, we’re going to sell your data on the side. That’s a violation of trust. A consequence is that if I don’t understand your business model and what you are offering me and what the value is to you, I can’t trust you. It’s that transparency in value, the relationship, and the motivations that are often left on the floor” –Sandy Pentland, MIT.</p>

<p>The formal recognition of data subject rights, combined with the prosecution of non-compliant businesses, creates an environment in which consumers can trust that businesses will not abuse their personal information once it is collected. This is invaluable, because countries in which businesses, governments and other institutions engender more trust experience stronger per capita real GDP growth. Macroeconomics has shown that as trust improves, economic prosperity grows.</p>

<h2>POPIA vs PIPL – The Political State and Regulatory Compliance Obligations </h2>

<p>The two laws diverge on the issue of state and governmental accountability. Enforcement of the PIPL is the responsibility of the Cyberspace Administration of China – a state backed regulator that also controls the list of approved news sources. Although the PIPL empowers individuals in their transactions with the private sector, the law does not restrict the state’s ability to collect and process its citizens’ personal information. </p>

<p>In contrast, South Africa’s POPIA is enforced by the <a href="https://www.inforegulator.org.za/">Information Regulator</a>, an independent body that is accountable to the National Assembly and subject only to the law and constitution. POPIA therefore applies equally to businesses and the state (with a few exceptions for judicial and national security purposes). By establishing an independent regulator, POPIA is similar to the European Union’s GDPR and California’s CCPA. When contrasted with China’s PIPL, South Africa’s POPIA highlights the democratic values enshrined in our constitution. </p>

<p>Regardless, both national regulators have the power to impose harsh punishments, and both require the identification of a party responsible for data protection and compliance (the PIPL goes further to require the specialized appointment of a “personal information protection officer” if certain thresholds for data processing are exceeded). For businesses and organizations, POPIA can serve fines of up to R10 million (±660,000 USD)and ten-year prison sentences, while the PIPL’s fines are heftier; up to 50 million Yuan (±7,800,000 USD) or 5% of the last year’s annual revenue. </p>

<h2>Risk Management – Data Breaches and Information Abuse </h2>

<p>Data breaches have become so pervasive that they have negatively affected the public image of technology and media companies. According to a survey by Deloitte, only 17% of respondents cited trust in the technology and media sector – unsurprising, considering the heightened levels of public scrutiny after the sector’s history of leaks and apathetic data security measures. The importance of this cannot be overstated, as in the same survey, 85% of respondents were “very or fairly likely” to sever an existing relationship with an organization if it does something that negatively impacts trust.</p>

<p>In the wake of repeated data breaches, regulatory oversight is now necessary to help ensure that businesses properly manage personal information. POPIA directly covers the issue of protecting against data breaches and adopts a Risk-Based Approach (RBA) that requires businesses to take reasonable precautions to protect against reasonably foreseeable risks. This means that if a business is instituting protective measures to combat reasonably foreseeable threats, such as common types of data breaches, then that business should be able to make a defendable legal case against the regulator and avoid penalties in the event of such a data breach. </p>

<p>The PIPL does not directly cover data breaches; that job is left mostly to the <a href="https://www.china-briefing.com/news/china-cybersecurity-regulations-what-do-the-new-regulations-say/">Cybersecurity Law</a>, which takes a far more complex and controlling approach. Data is categorized as ‘general data’, ‘important data’, or ‘core data’, and each of these categories comes with their own security and processing requirements. The Law also stipulates multiple scenarios in which companies must undergo security reviews, both for national and international data handling. </p>

<h2>Cross Border Compliance – The Complex Road to Universal Standards?</h2>

<p>POPIA and the PIPL both regulate cross border data transfers, but China’s PIPL is far more constrictive – in some cases it even requires businesses to undergo a security assessment by the Cyberspace Administration of China before being allowed to transfer personal information out of China. The PIPL has also made it even more costly and inefficient for companies to store Chinese data overseas, thereby promoting the storage of all Chinese personal information on mainland China. Such constraints have serious implications: following other firms, LinkedIn withdrew from China in 2021 <a href="https://www.linkedin.com/pulse/linkedin-leaving-china-sam-maiyaki/">citing</a> “a significantly more challenging operating environment and greater compliance requirements”. </p>

<p>However, national standards for cross-border data transfers are not new. The GDPR requires the EU commission to “determine whether non-EU countries “offer guarantees ensuring an adequate level of protection essentially equivalent to that ensured within the Union”. Compliance with these requirements is desirablebecause countries that meet these requirements face lower trade barriers to doing business with EU citizens.</p>

<p>Lower barriers to trade have tangible effects: a report issued before the UK complied with GDPR requirements estimated that not meeting them would cost UK firms between 1 billion and 1.6 billion Pounds due to theadditional compliance obligations. The extraterritorial scope of modern data privacy legislation can seriously constrain or promote business – developing global standards that protect personal information but minimize compliance obligations is therefore an objective worth pursuing. </p>

<p>In <a href="https://digichina.stanford.edu/work/translation-personal-information-protection-law-of-the-peoples-republic-of-china-effective-nov-1-2021/">Article 12</a> of the PIPL, China clearly outlines its ambitions to be at the forefront of such global standards for personal information protection…</p>

<p>“The [Chinese] State vigorously participates in the formulation of international rules [or norms] for personal information protection, stimulates international exchange and cooperation in the area of personal information protection, and promotes mutual recognition of personal information protection rules [or norms], standards, etc., with other countries, regions, and international organizations.”</p>

<p>Although Article 12 speaks of “cooperation in the area of personal information protection”, the highly restrictive nature of China’s current legislation sets it at odds with existing norms established by the GDPR. Successfully negotiating global standards for data protection, reconciling China’s more restrictive approach with current norms, and generating the necessary multilateral support would be an immense challenge. China’s powerful economy would grant it significant bargaining power within such negotiations, but different political contexts would likely see nations disagree on issues of state accountability, national security, and the degree to which individuals are wholly protected by such legislation. </p>

<p>The value of data protection laws for the protection of individual rights is proven and recognized. How nations will negotiate a solution to the increasingly complex intersection of such legislation remains to be seen. </p>

<h2>Regulatory Compliance, Today </h2>

<p>The rapidly expanding web of regional and international laws can make regulatory compliance a daunting task. The regulatory requirements that compel businesses to consider KYC, AML/CFT and privacy and cybersecurity – all while operating in a risky digital world packed with the sensitive personal information of clients – can seem inconceivable. </p>

<p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To book a demonstration and ensure future regulatory compliance, contact our team here.</p>


What are the differences between SA’s and China’s data privacy laws, and how might China shape the global future of personal information protection?

POPIA vs China’s PIPL: What is the Future of Data Privacy?

<p>For years, the South African retail banking sector has been plagued by debit order fraud. Also known as R99 scams, they were typically debit orders of less than R100 that are billed monthly without the knowledge or consent of the account owner. </p>

<p>In the past, debit orders below R100 did not warrant a notification being sent to the victim and could therefore go unnoticed for months or years. Although these debit orders were reversable if detected, the sheer volume of fraudulent debit orders left South Africans deeply frustrated. However, the introduction of the DebiCheck system addresses this issue. </p>

<h2>The DebiCheck Mandate and System Explained </h2>

<p>DebiCheck’s full name is the AC/DebiCheck system. AC stands for Authenticated Collections system, which is a <a href="https://www.resbank.co.za/en/home/what-we-do/payments-and-settlements/regulation-oversight-and-supervision">type of debit order</a> that allows the user to confirm the details of a contract with their bank before the debit order is processed. </p>

<p>The AC/DebiCheck system replaced the old Early Debit Order (EDO) system. Under the EDO system, consumers provided a mandate to a company or other user to collect money from their account – a system that was vulnerable to widespread abuse and fraud.</p>

<p>Under the new AC/DebiCheck system, this mandate to withdraw funds from an individual’s account is now given to the bank (instead of a business). The bank is then responsible for releasing funds when a valid debit order is submitted by a company or individual. </p>

<p>Crucially, the new AC/DebiCheck system allows for the consumer to personally approve the debit order with their bank before it is debited. Once it has received this individual validation, the bank confirms the exact details of a debit order and constantly checks that it adheres to the agreed upon contract. </p>

<p>The South African Reserve Bank claims that the AC/DebiCheck system eliminates the potential for debit order fraud. When it was launched by the South African Reserve Bank on the 1st of May 2021 after more than six years of development and a price tag of over R5 billion, the AC/DebiCheck system became the first of its kind in the world. </p>

<p>The Financial Sector Conduct Authority – a regulator created by South Africa’s adoption of the Twin Peaks financial model – will promote future projects the AC/DebiCheck system that are designed to drive better consumer outcomes. </p>

<h2>What is the Twin Peaks Financial Model? </h2>

<p>Adopted by South Africa in 2018, the Twin Peaks financial model has fundamentally changed the country’sfinancial regulatory system by introducing two new regulators: the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA). </p>

<p>The Prudential Authority is charged with maintaining the stability of the financial system. To achieve this, Prudential regulation is applied to financial institutions such as banks, securities firms, and insurance companies to ensure that they are financially sound and capable of meeting their obligations to customers.</p>

<p>The FSCA, on the other hand, is responsible for market conduct and consumer protection. Having absorbed the Financial Services Board (FSB), the FSCA is tasked with market conduct regulation in all aspects of financial services, including banking, insurance, and advisory services. The FSCA will supervise how financial institutions conduct their business and treat customers, as well as taking responsibility for significantly improving customer protection in the financial sector and driving better customer outcomes. </p>

<h2>Fighting Financial Crime and Debit Order Fraud </h2>

<p>Debit order fraud had become a serious issue in South Africa. According to a <a href="https://www.sabric.co.za/stay-safe/debit-order-scams/">2019 statement</a> from the South African Banking Risk Information Centre (SABRIC), over 1.5 million debit orders were disputed per month, of which roughly 150’000 are genuinely fraudulent. Furthermore, A 2019 joint probe by SARS, the Hawks and the SAPS into the entire South African financial industry revealed that fraudulent debit orders were totaling at least R1.6 billion a year. </p>

<p>The issue of debit order fraud reflects South Africa’s pervasive issue of economic crime. Since 2009, the country’s incident rate has been, on average, 27 percentage points higher than the global average. In 2020, South Africa was tied with China for the country with the highest reported incident rate of economic crime. </p>

<h2>Fraud Prevention Services – KYC Verification and Enhanced Due Diligence</h2>

<p>Although the fight against financial crime is generally spearheaded by government agencies and regulators, the private sector also has a vital role to play in combating financial crime. Compliance with laws and regulations, coupled with proper risk management and enhanced due diligence procedures, hold the key to an economy in which transactional trust is the norm, not the privileged exception. </p>

<p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services and see how we can help you streamline your regulatory compliance, book a demonstration by contacting our team here.</p>


How the AC/DebiCheck system and the Twin Peaks financial model will help to fight fraud and economic crime in South Africa.

How SA Addressed Debit Order Fraud – DebiCheck and the FSCA Explained

<h2>What is Data Protection and Data Privacy Legislation? </h2>

<p>Data protection and data privacy legislation are laws that protection your rights to online privacy by controlling when and how businesses and organizations can collect, utilize and store your personal information. </p>

<p>The Protection of Personal Information Act (POPIA) is South Africa’s data protection law. When it was passed on July 1st, 2021, POPIA brought South Africa’s data protection standards on par with the EU’s General Data Protection Regulation (GDPR), a law which has shaped global norms and values since its debut in 2016.</p>

<p>However, the value of data protection legislation like POPIA goes beyond just protecting your personal information. By fostering trust between the consumer and the business, legislation like POPIA has the power to shape our economies – macroeconomics has shown that as trust improves, economic prosperity grows.</p>

<h2>Understanding POPIA – Summary </h2>

<p>Essentially, POPIA protects individuals by ensuring that businesses adhere to proper legal standards when collecting, utilizing and storing your private information. Businesses must acquire your full, knowledgeable consent before collecting and processing any of your personal information. </p>

<p>The Act is enforced by the <a href="https://www.justice.gov.za/inforeg/about.html">Information Regulator</a>, which is “empowered to monitor and enforce compliance by public and private bodies with the provisions of the POPIA Act.” Businesses that are non-compliant with POPIA can be prosecuted by the Information Regulator and handed severe punishments: fines totalling R10 million and prison sentences of up to 10 years for complete breach of the Act, while minor offences are punishable with a fine and a prison sentence of a maximum of 12 months.</p>

<p>For a business-centric summary of 8 POPIA conditions from a regulatory compliance perspective, read our analysis here.</p>

<h2>POPIA Compliance – Who is Affected? </h2>

<p>Since it became legally enforceable on July 1st, 2021, every business, NGO, trust, and other such organizations have had to comply with POPIA (apart from South Africa’s parliament and judicial system). </p>

<p>POPIA often uses the term ‘Data Subject’, which refers to the person or entity that the personal information belongs to or is about. Because nearly every person has had their personal information processed by a third party, every individual is a data subject to some degree. </p>

<p>As a data subject, you will not have to worry about complying with POPIA. Information that is purely for personal household activities is exempt, as well as information that exists for journalistic, literary, or artistic purposes. </p>

<h2>What Are Your Data Subject Rights? </h2>

<p>POPIA outlines eight basic conditions for the legal processing of personal information. Of these eight, the following five are essential to understand from the perspective of a data subject…</p>

<h3>Condition 2 - Processing Limitation </h3>

<p>Every business or organisation must acquire your explicit consent before they can gather and process your personal information. A business should not collect and process more information than is necessary for the task at hand, and it should always be done in a manner that does not infringe upon the data subject’s privacy.</p>

<h3>Condition 3 - Purpose Specific</h3>

<p>Your personal data can only be collected and processed for a specifically defined and lawful purpose, which you must have consented to. Additionally, personal data must be destroyed once it has served its purpose or after an agreed-upon timeframe.</p>

<p>While condition 2 requires your consent before a business can collect and process your data, Condition 3 means that businesses must clearly state what they are going to use your personal information for. </p>

<h3>Condition 4 - Further processing limitation </h3>

<p>Your personal information cannot be reused for a secondary purpose after it has already been collected. If a business wants to use your personal information for a purpose different to what it was originally collected for, you will have to grant them additional consent.</p>

<p>Although businesses may have formerly abused your right to privacy by reusing your data or selling it to third parties for a profit. However, this is now illegal unless you consent to it. For example, if you grant permission for your personal information to be used for medical reasons, that information cannot be sold to advertisers unless you explicitly consent to it. </p>

<h3>Condition 6 – Openness </h3>

<p>A business must always tell you exactly who is collecting and processing your data, as well as for what purpose it is being processed. </p>

<p>In most cases, this information will be outlined within a business’s privacy policy, user agreement or terms and conditions of use. Businesses must be able to prove that you knew and consented to these, so consumers will typically be asked to consent by clicking ‘agree’ on such documentation. </p>

<h3>Condition 8 - Data Subject Participation </h3>

<p>You have the legal right to request the immediate correction or deletion of any personal data, as well as requesting knowledge of where and how your data is being stored.</p>

<p>Additionally, you have the right to always ‘opt-out’ of direct marketing – advertising via SMS, email, or telephone calls from businesses must always be optional. </p>

<h2>Why POPIA Is So Important – Fostering Trust and Economic Growth </h2>

<p>Trust – understood as “our willingness to be vulnerable to the actions of others because we believe they have good intentions and will behave well towards us” – has been repeatedly undermined by companies and governments mismanaging and abusing personal information. Although due to many variables in addition to the abuse of personal information, the decay of trust is rife: we are more suspicious of businesses, government, and each other than ever before, and the share of the global population that felt like most people could be trusted has fallen by 20% over the last 15 years.</p>

<p>Laws that govern the protection of personal information – such as POPIA, the GDPR and China’s PIPL – are essential for restoring this trust. In an <a href="https://www2.deloitte.com/us/en/insights/topics/digital-transformation/the-importance-of-digital-trust-qa.html?id=us:2el:3dp:wsjspon:awa:WSJCMO:2022:WSJFY22">interview</a> with Deloitte, the director of MIT’s Connection Science laboratory Sandy Pentland explained the value of transparency when dealing with personal information.</p>

<p>“I’m going to deliver this service to you, and then without really making it clear, we’re going to sell your data on the side. That’s a violation of trust. A consequence is that if I don’t understand your business model and what you are offering me and what the value is to you, I can’t trust you. It’s that transparency in value, the relationship, and the motivations that are often left on the floor” –Sandy Pentland, MIT.</p>

<p>The legal requirement for the acquisition of data subject consent empowers individuals to make informed decisions about how and when their personal information is collected and processed. This fosters an environment in which consumers can trust that businesses will not abuse their personal information once it is collected. This is invaluable, because countries in which businesses, governments and other institutions engender more trust experience stronger per capita real GDP growth. Macroeconomics has shown that as trust improves, economic prosperity grows.</p>

<h2>The Value of KYC and Enhanced Due Diligence</h2>

<p>It is clear how vital it is to rebuild the trust we have lost. However, it is naïve to simply ask people to trust one another. The risk of loss is too high. Trust must be rebuilt on verifiable identities that can offer peace of mind by affirming the integrity of those we do business with.  </p>

<p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team here.</p>


What are your rights as a data subject? Five crucial POPIA conditions explained and analysis of why POPIA and data privacy laws are so important.

POPIA Meaning and Purpose: How the POPI Act Protects South Africans

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<h5 class="title">ThisIsMe API</h5><blockquote>Integrate today to seamlessly automate and scale your key processes with our standards-based API</blockquote><p class="w-80 w-m-100">Essential verification tasks need not be a drain on resources. By integrating your key processes directly with our API, you ensure compliance, reduce risk and deliver a swift experience your customers will love.</p><a class="btn btn-small btn-olivine-green cms-btn" href="https://ct-live-api.thisisme.com/" target="_blank">Documentation</a>

<h5 class="title">Hosted Verifications</h5><blockquote>Our Partners Platform empowers hundreds of users with the tools they need to validate and verify information every day</blockquote><p class="w-80">When direct integration is not required, our hosted solution, the Partners Platform, can execute any service available via API integration, right in the web. The Partners Platform can be customised to fit branding requirements and company permissions are strictly followed, putting you in control of who sees what.</p><a class="btn btn-small btn-olivine-green cms-btn" href="/#Demo-Form">Request Demo</a>

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<p>Accountable and Reporting Institutions (AI’s and RI’s) are all too familiar with the headache surrounding FICA requirements of verifying customers. Thankfully, the risk-based approach adopted with the 2017 Amendments to FICA puts the power in the hands of AIs and RIs.&nbsp;</p><p>Our suite of products and services provide confirmation of an individual’s identity, most probable address, contact number, and employer information in real time, allowing our clients to corroborate information and documents they’ve been supplied with.&nbsp;</p><p>When riskier transactions present themselves, elevated risk checks supporting enhanced due diligence exercises can easily be performed via the same platform.</p>

ThisIsMe combines access to golden-source data with world-class technology allowing for seamless KYC regulatory compliance

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<p>When getting onboarded, clients, customers and staff are often subjected to cumbersome procedures that fail to adequately reduce the inherent associated risk for the organisation.</p><p>Simplify your customers’ journey and optimise internal resources by replacing legacy procedures with ThisIsMe’s state-of-the-art onboarding solutions. Our leading digital onboarding services are designed to satisfy all onboarding requirement and range from simple CID (Customer Identification) transactions to enhanced customer due diligence exercises. ThisIsMe also offers bespoke onboarding solutions for clients whose complex set of demands require an approach that is tailored to their specific business requirements and risk determination strategies.&nbsp;<br></p><p>Our services can be consumed via Mobile SDK (Android and iOS) and through API microservices, thereby giving you the flexibility to inject smart validation into all stages of the onboarding process.<br></p>

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<p>ThisIsMe provides direct, real-time identity verification services by utilising the Home Affairs National Identification System (HANIS) database – a system that provides multiple solutions for the verification of an individual’s national identity and deceased status.&nbsp;</p><p>The rapidly increasing demand for real-time application processing has made identity verification a critical component of any business’s engagement strategy.&nbsp;<br></p><p>ThisIsMe’s identity verification services empower businesses to mitigate risk associated with identity fraud by quickly and accurately verifying a client’s identity, all while maintaining the highest standards for data security, confidentiality, and customer experience.&nbsp;<br></p>

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<p>By using a photograph or captured selfie to cross-check and verify identity, ThisIsMe’s Biometric Verification Solution offers the highest degree of real-time risk mitigation for businesses engaging with clients in a digital or face-to-face environment. </p><p>The service scans a photograph or captured selfie and transforms facial features into digital biometric information. The information is then used to cross-check the photograph against a provided Identity Document or Passport, thereby confirming or invalidating the individual’s provided identity information.</p><p>For South African citizens, ThisIsMe offers an enhanced service that crosschecks a photograph and a given identity document against the digital image held by the DHA on the Home Affairs National Identification System (HANIS).</p><p>A detailed report is generated confirming the matching results between the various images including those retrieved from the HANIS database.</p>

Determine the validity of an individual’s identity with our facial recognition solutions

Facial Biometric Verification

<p>ThisIsMe’s risk assessment services help to ensure regulatory compliance by complimenting an effectively implemented risk-based approach.&nbsp;</p><p>Our Anti-Money Laundering protocols, Politically Exposed Persons checks, and Sanction Screening solutions provide a detailed and timeous identification of potential risk, thereby allowing businesses to properly execute their risk mitigation procedures and ensure regulatory compliance.&nbsp;<br></p><p>ThisIsMe offers multiple additional tools for the further investigation into potential risk, including risk related to mobile telephone numbers, email addresses, or credit-risk specifically. Our Credit Risk Assessment solutions range from a simple Credit Score and Summative Credit Profiles, all the way through to a Complete Consumer Credit Report.<br></p>

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<p>ThisIsMe’s Information Validation Services allow for the quick and efficient validation of documents and information. Our services allow businesses to reduce costs and streamline cumbersome administrative tasks such as client onboarding or the management of a customer base, while still maintaining the highest standards for data accuracy, security, and customer experience. &nbsp;</p><p>ThisIsMe offers a range of solutions that provide access to data sources covering Contact Information, Address Data, Employer Information, Property Ownership, CIPC Business Principal Statuses, Trusts, and Marital Status Information. &nbsp;Access to this information is provided in multiple forms, via multiple channels, thus ensuring the most appropriate solution to each of our clients’ unique business requirements and existing workflows.<br></p>

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