In a significant stride towards bolstering financial security, document verification innovator SkyQR has announced that its cutting-edge QR code technology has helped the South African banking and credit sectors prevent losses exceeding R2.5bn over the past five years. This milestone underscores the growing importance of advanced digital solutions in combatting application fraud, which continues to threaten the integrity of financial institutions nationwide.
Application fraud – where applicants submit false, misleading or stolen information to secure credit, loans or insurance – has become an increasingly sophisticated crime. Criminals use fake identities, falsify income details, or misrepresent financial histories with the sole aim of duping institutions into approving credit or services they are not entitled to. Such fraudulent activities lead not only to significant financial losses but also to operational disruptions and a loss of trust in financial systems.
Kapish Soma, managing director of SkyQR, emphasises the gravity of this issue: “Application and document fraud are hitting South Africa’s banking and retail credit sectors very hard. The landscape is evolving rapidly. Criminal networks are becoming more sophisticated, leveraging digital tools to forge documents with remarkable realism. Unfortunately, many businesses still rely on manual checks or outdated verification processes, which leave gaps vulnerable to exploitation.”
Recent statistics highlight the gravity of the problem. For instance, the incidence of fraudulent vehicle asset finance applications in South Africa more than doubled from 2022 to 2023. The South African Banking Risk Information Centre’s Annual Crime Statistics Report estimates that potential losses from such fraud could reach as much as R13.5bn. The annual cost of fraud per business is also significant; the LexisNexis® True Cost of Fraud™ Study 2023 reports that for every rand lost to fraud, companies incur an average cost of R3.64. Financial institutions, bearing a larger burden, average R4.52 in costs for every rand defrauded – costs that include investigation expenses, operational disruptions and reputational damage.
Recognising the urgent need for a more robust and reliable fraud prevention mechanism, Capitec Bank partnered with SkyQR in 2020. The collaboration has seen remarkable results, as Capitec incorporated SkyQR’s innovative QR code verification technology across all its issued documents. This integration allows third-party verifiers to scan embedded SkyQR codes on documents – such as identity cards, proof of income or bank statements – instantly confirming their authenticity with high precision. This system has markedly reduced the risk of fraud, safeguarding both the bank and its customers.
To date, SkyQR has generated 590-million QR codes and facilitated more than 2.5-million document scans for Capitec alone. Such widespread adoption exemplifies how digital verification methods can be seamlessly integrated into existing workflows, enhancing security without complicating user experience.
Keeping ahead of emerging threats
Beyond its impact on banking, SkyQR’s technology has expanded into other sectors where document authenticity is critical. Education institutions, health-care providers and e-commerce platforms now leverage SkyQR’s QR verification solutions to prevent fraud and ensure integrity in their operations. By continuously innovating, the company stays ahead of emerging threats, aiming for comprehensive, adaptable security solutions across multiple industries.
Soma notes: “On average, we help microfinanciers save R1.5m each month, and vehicle financiers approximately R30m in loans per month that otherwise would have been issued under false pretences. Our technology is making a tangible difference, saving millions and building trust in financial transactions.”
Founded in 2019, SkyQR offers a user-friendly, accessible solution with its free-to-download QR scanning app available on all devices. Organisations pay a fee when third parties scan and verify specific documents, creating a scalable and cost-effective model for fraud mitigation. With offices in Cape Town and Joburg, SkyQR is committed to transforming security protocols across diverse sectors – empowering businesses to detect and prevent fraud with confidence.
The success of SkyQR’s QR code technology demonstrates the critical role digital innovation plays in fighting financial crime. “As criminal tactics evolve, so must the strategies of institutions. SkyQR’s ongoing commitment ensures that South Africa’s financial industry remains resilient, trustworthy, and prepared for the future,” concludes Soma.
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