Cybercrime is rising rapidly as digitalisation transforms how consumers and businesses interact online. From banking and e-commerce to social media, data infiltration is a universal threat.
Stolen credentials and hacked databases have become a regular feature in global news, with attacks targeting even the most security-conscious corporations, claims RelyComply.
High-profile incidents include the “Shiny Hunters” breach at French luxury group Kering, which exposed 7.4m records, and “Scattered Spider” attacks on major firms like Allianz and Victoria’s Secret. This escalating threat makes Cybersecurity Awareness Month more relevant than ever.
Across industries, data remains a prime target for criminal exploitation—whether for financial gain or identity theft. Financial institutions (FIs) face particularly high stakes, as any failure in data privacy or anti-money laundering (AML) controls can have devastating, often irreversible consequences. With regulatory scrutiny tightening worldwide, AML systems have become the front line in protecting customer trust and institutional integrity.
In Africa, financial services and government bodies are among the top sectors hit by cybercrime, alongside telecommunications. Fraud losses in South Africa alone amount to roughly R5.3bn each year, according to Check Point Research, with local organisations facing an average of 2,113 attacks weekly—a 14% annual increase. Such statistics underline the scale of the problem for economies where digital transformation outpaces cybersecurity readiness.
Globally, cybercrime has become a trillion-dollar concern. Every piece of personal data stored online—whether banking details or social media accounts—represents potential exposure. Weak know your customer (KYC) checks and outdated AML systems exacerbate this risk, leaving companies vulnerable to expensive breaches that can cost upwards of R44.1m. Beyond the financial toll, the reputational damage can be irreparable.
Financial institutions must strengthen their defences by addressing five critical vulnerabilities. These include inadequate risk assessment at onboarding, weak authentication systems, poor identity verification (IDV), siloed AML data storage, and the widening skills gap in cybersecurity talent. Each of these weaknesses creates opportunities for criminals to infiltrate systems, exploit customer data, and evade detection.
Cybercriminals have evolved into sophisticated networks that collaborate globally. They exploit even minor system flaws using social engineering tactics, deepfakes, and generative AI to impersonate individuals or organisations. With phishing scams and fabricated digital identities becoming increasingly convincing, even advanced IDV technologies face challenges. Meanwhile, underreporting of fraud—down to 65.1% in South Africa—means many incidents remain invisible to regulators and law enforcement.
Efforts to combat cybercrime are intensifying. Governments and regulators are introducing new frameworks, such as the European Union’s Digital Operational Resilience Act (DORA) and Cyber Resilience Act, which aim to strengthen institutional resilience. Denmark is also considering legal measures to safeguard personal identity from imitation. While regulation provides structure, it also increases compliance complexity, which many organisations find difficult to manage.
Partnerships between FIs and RegTech providers are proving vital. Integrated fraud detection, AI-powered monitoring, and automated screening systems help identify suspicious activity more effectively. Cloud-based compliance platforms that align with local and global AML and data privacy laws also offer secure data management. Additionally, AI training models allow institutions to simulate threats and adapt their defences in real time, ensuring continuous improvement against evolving cyber risks.
Cybersecurity Awareness Month highlights that knowledge alone is not enough; proactive collaboration between regulators, governments, and the private sector is essential. RegTech solutions play a crucial role in bridging the gap between compliance and protection, enabling a unified approach to safeguarding consumer data. Ultimately, strengthening KYC and AML systems to meet the realities of modern cyber threats is the most effective step financial institutions can take to close vulnerabilities before criminals exploit them.
Copyright © 2025 RegTech Analyst
Copyright © 2018 RegTech Analyst
