On Wednesday, South Africa’s Financial Sector Conduct Authority (FSCA) announced a R200 million investment to be deployed over the next 18 months to strengthen its monitoring and enforcement capabilities in response to the country’s rise in online financial scams.
According to Bloomberg, the move comes as South Africa grapples with a surge in digital fraud, including advanced cryptocurrency schemes and a sharp increase in deepfake-related crimes.
The growing threat of online scams
Online scams have become a major concern in South Africa, with cybercriminals employing increasingly sophisticated tactics. According to recent reports, the country experienced a 1,200 percent surge in deepfake incidents between 2022 and 2023.
Additionally, the region has been linked to some of the world’s largest cryptocurrency fraud cases in recent years.
To address these challenges, the agency is undergoing its largest IT restructuring. The R200 million investment will enhance the regulator’s ability to detect and investigate financial crimes, particularly those involving digital assets.
Commissioner Unathi Kamlana emphasised that the agency is also recruiting specialists in cryptocurrency supervision to combat crypto-related fraud more effectively.
Also, the agency plans to expand its workforce from 680 employees to over 750 within the next three years. This increase in personnel will enhance the regulator’s capacity to enforce compliance and penalise offenders.
The FSCA has already taken steps to crack down on financial misconduct. In the 12 months leading up to March, the regulator carried out 1,350 enforcement actions and imposed fines totaling R120 million.
While this marks a decrease from the previous year’s record R943 million in penalties, the authorities view this as a sign of success, indicating that their efforts deter fraudulent activities.
“Our actions have served as an effective deterrent,” said Kamlana. “We prioritise cases that have the most significant impact on the financial sector and consumers.”
FSCA’s regulation strategy plans
The FSCA’s 2025-2028 Regulation Strategy outlines plans to stay ahead of the latest threats and ensure that South Africa’s financial markets remain secure and transparent even as financial technology (fintech) and artificial intelligence (AI) grow.
With this major investment and expanded workforce, they aim to restore confidence in the financial sector and protect the citizens from online scams.
The regulator’s approach will serve as a strong example for other nations, such as Nigeria, Kenya, and Egypt, which are struggling with similar challenges in the digital age.
By strengthening oversight and enforcement, South Africa is taking a crucial step toward safeguarding its economy and investors from the effects of financial fraud.