Investigative Research Proposal: Mobile Banking Fraud - South Africa

This document presents a research proposal submitted by a student, focusing on mobile banking fraud in South Africa. The proposal outlines the research context, problem, aim, objectives, and research questions. It delves into the significance of the study and includes a comprehensive literature review, defining fraud in mobile banking, exploring contributing factors, different fraud types, impacts, security issues, and mitigation strategies. The methodology section details the research design, sampling strategy, data collection instruments, data analysis, and ethical considerations. The proposal also provides a chapter organization plan, a proposed timetable, and a bibliography. The research aims to evaluate the state of mobile banking in South Africa, analyze fraud factors, and assess the impact of fraud on the banking system. The study employs both qualitative and quantitative methods, including surveys and analysis of existing research. The proposal covers various types of mobile banking fraud, including consumer-driven, agent-driven, and business partner-related fraud, along with the development of smart tools and processes to mitigate these issues.

PROPOSAL SUBMISSION TEMPLATE
Please complete section A below
SECTION A: GENERAL DETAILS
Student number 130644
Title Mr
Surname Mahonono
First name/s Sabath Andrew
Title/topic of research
Investigative research into the state of mobile banking fraud: A South African Case
Study
Date and year of registration of the
dissertation July 2019 Intake
Contact details
Work (011) 974 – 3259
Home 071 851 1108 / 083 292 6119
Cell 071 851 1108 / 083 292 6119
Email [e-mail]
Region Gauteng
Date submitted
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Table of Contents
1. Introduction...............................................................................................................4
2. Research Context:....................................................................................................4
3. The Research Problem.............................................................................................5
4. Aim of the Study.......................................................................................................5
5. Research Objectives................................................................................................5
6. Research Questions.................................................................................................6
7. Significance of the study...........................................................................................6
8. Literature Review......................................................................................................7
8.1 Definition of Fraud in mobile banking:................................................................7
8.2 factors leading to fraud in mobile banking:.........................................................7
8.3 Different types of fraud in mobile banking:.........................................................7
8.4 Impact of fraud on mobile banking:.....................................................................8
8.5 security issues in mobile banking fraud:.............................................................8
8.6 Development of Smart Tools and Processes in order to mitigate the fraud:......8
8.7 Summary:............................................................................................................9
9. Research design and methodology..........................................................................9
9.1 Research methodology.......................................................................................9
9.2 Sampling strategy...............................................................................................9
9.3 Data collection instruments.................................................................................9
9.4 Data analysis.....................................................................................................10
9.5 Pilot study..........................................................................................................10
10. Ethical considerations...........................................................................................10
11. Chapter organisation............................................................................................10
12. Proposed timetable...............................................................................................11
13. Bibliography..........................................................................................................11
Appendices.................................................................................................................13
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Appendix 1- Questionnaire:....................................................................................13
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1. Introduction
In the contemporary business scenario, innovation is one of the most significant
factors of promoting the growth of business. Mobile technology is considered as
the most significant forms of innovation over last 30 years (Akomea-Frimpong et al.
2019).The rate of using mobile technology in the activities of banking related
activities such as funds transfer, bill payments, investment purchase or sale,
transactions and shopping. However, with the rapid usage of technology in the
banking services, the security related issues is also increasing in a prompt manner.
The research will put forth the discussion about the mobile banking fraud. Detailed
literature review will be conducted to get comprehensive knowledge regarding
mobile banking fraud (Vishwakarma et al. 2019). Furthermore, this paper will also
contain the methods which will be followed to carry out the research in a systematic
manner.
2. Research Context:
Usage of technology in the financial services is increasing in a rapid manner and
playing a major role in attaining tremendous impetus to their development. In order
to offer high quality of financial services and keep the staffs satisfied, the banks are
making significant investment in the way of adapting high end technology and
promote speed in the internal functionality (Abdullaev et al. 2019). The inclusion of
both telecommunications and adaptation of mobile phones in order to provide
financial services is posing major threat for the banks to maintain security. With the
prompt development of cybercrime through technology, the rate of fraud in the
mobile banking is also accelerating in a rapid manner. It is true that the banking
services areimproving rapidly owing high accessibility of online information.
However, the data related to online transaction is not free from the security issues.
In addition, it has been reported that the cases of fraudulent cash withdrawals,data
theft, debit card scams and account information hacking are increasing drastically
(Lakshmi et al. 2019).
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3. The Research Problem
The rate of mobile banking fraud is increasing in a rapid manner and increasing the
degree of risk for banks and other financial institutions. The risks such as message
modification, digital rightsinfringement, loss of revenue, theft of content and illegal
transfer of funds which are being faced by the banking services in the
contemporary times. These issues are affecting the sensitivity issues and
generating lack of trust among the customers (Sundaram et al. 2019). The failure
of mobile banking system is one of the major reasons, leading to high degree of
fraud in the financial service.
4. Aim of the Study
It is imperative to set a clear aim in order to give the research a proper direction.
This is the way of carrying out the research in a systematic manner.The aim of the
present research is “To evaluate the state of mobile banking in the context of
South Africa”. The factors and impact of mobile banking fraud will be discussed in
the paper.
5. Research Objectives
Setting clear research plays a critical role in showing the steps of satisfying the
research aim and thus completes the research in a comprehensive manner. The
objectives of present research are as follows: To define fraud in the context of mobile banking To explore the factors that are leading to fraud in the mobile banking To analyse different types of fraud in mobile banking To assess the impact of fraud in mobile banking To explore the tools and processes that have been developed in the way of
dealing with the issue of mobile banking fraud To understand the security issues in mobile banking fraud
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6. Research Questions
The research questions are the important factors of satisfying the research
objectives. The research questions are presented below: What is the concept of fraud in the context of mobile banking? What are the factors leading to fraud in the mobile banking? What are the types of mobile bankingfraud? How fraud is affecting the entire banking system? What are the tools and processes, been developed in the way of dealing
with the issue of mobile banking fraud? What are the security issues in mobile banking fraud?
7. Significance of the study
The study is based on the fraud in mobile banking in the context of South Africa.
The usage of internet and technology in the way of providing effective financial
service is increasing in a rapid manner. However, the usage of mobile in both
providing and acquiring financial services is resulting in effective security issues
(Veríssimo 2016). There lies the significance of this research as it will help in
exploring the issues, faced by the banks and other financial institutions.
Furthermore, this research will also help in assessing the impact of the mobile
banking fraud and the tools that have been developed in the way of mitigating the
issue.
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8. Literature Review
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8.1 Definition of Fraud in mobile banking:
Fraud is defined as the unlawful or illegal activity, which is practiced deliberately in
terms of securing unfair gain. It is imperative to note here that in the context of
mobile banking, fraud is practiced intentionally by the key players of mobile
financial services ecosystem for the sake of gaining in the form of money (Lande et
al. 2018). Bank fraud is basically the way of using illegal means in order to gain
money, assets and others properties, as given by the financial institutions. Bank
fraud is considered as the criminal offence, which can even lead the players of
financial institutions to face severe legal issues (Kar, et al. 2015).
The trend of using technology for illegal activities is increasing in a rapid manner.
As per the report published by The South African Banking Risk Information Centre,
in the year 2017, the incidents of mobile banking fraud was 13,438 which has been
increased by 7% in the year 2018 (Businesstech.co.za. 2019).
8.2 factors leading to fraud in mobile banking:
There are several factors, which are leading to high range of fraud in the context of
mobile banking. Weak regulation is one of the most significant factors, leading to
high degree of fraud. This is creating inability among the regulators to monitor the
mobile money ecosystem and setting guideline for the stakeholders. This, in turn is
increasing the likelihood of fraud in the entire system (Hassani et al. 2018).
Weak or non-standardised processes are another major factor, leading fraud in
mobile banking. This is making entire system, open to everyone. High cost of
transactions is another major factor, leading the customers to abuse the system in
terms of carrying out the entire process of transaction. This is resulting in high
degree of fraud.
8.3 Different types of fraud in mobile banking:
There are different types of fraud which is affecting the entire mobile banking
system in a systematic manner. Consumer driven fraud is one of the major types
of mobile banking fraud which targets the financial service providers, agents and
other consumers. The chances of mobile banking fraud are high in the process of
transaction. Agent driven fraud is another major type of fraud which is initiated by
the agents or other consumers. This stage is most prevalent at the initial stage of
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entire banking system. Business partner related fraud is also a crucial mobile
banking fraud which is defined as the fraudulent activities within the business
partner’s network, which is prevalent at the value addition stage (Mwangi and
Brown 2015).
8.4 Impact of fraud on mobile banking:
Fraud is one of the most alarming issues in the entire banking system which needs
to be mitigated on the urgent basis. It is affecting the credibility of the mobile
financial service and the interest of customer protection. Mobile banking fraud is
also discouraging the subscribers as the fear of losing funds is playing among
them. Such fear of fraud is also affecting the consumer market which is posing
major threat in the entire business environment (Van Deventer et al. 2017). This
will affect the transaction and customer growth in future. In addition, high degree of
mobile banking fraud is also affecting the brand identity of banks and other
financial institutions.
8.5 security issues in mobile banking fraud:
Mobile banking fraud is resulting in high degree of security issue in the whole
banking system. Illegal usage of internet is making the banking system exposed to
everyone which is resulting in third party data intrusion and losses. Lack o effective
mechanism is making the mobile banking system, highly vulnerable to monetary
risk and potential security issues. This leading high dissatisfaction and concern
among the customers and creating barrier for them to take investment related
decision.
8.6 Development of Smart Tools and Processes in order to mitigate the
fraud:
Mobile banking fraud is considered as the most alarming issue in the contemporary
times. In order to mitigate this issue, smart tools and processes have been
implemented. New and better interfaces have been developed for the sake of
protecting the confidential data from any kind of illegal activities. Scaling up for
existing services is also initiated to mitigate this issue. It is imperative to automate
the entire service of banks and other financial institutions in identify the resources
in terms of deal with this issue (Van Deventer 2016).
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8.7 Summary:
Fraud is considered as the major forms of misinterpretation of material which leads
to account information hacking, non-disclosure and even cancellation. With the
rapid development of mobile banking technology, the banks are facing significant
issues in the way of maintaining ethics while providing services to the customers.
9. Research design and methodology
9.1 Research methodology
Research methodology is considered as the general plan which plays a critical role
in completing the research in a systematic (Kumar 2019). In order to complete this
research, both qualitative and quantitative method will be followed. For quantitative
research, the experimental design will be followed to get detailed knowledge
regarding the topic.
9.2 Sampling strategy
In order to carry out the research, in a systematic manner, it is imperative to follow
a comprehensive sampling strategy. This supports in getting firsthand experience
regarding the subject matter (Mackey and Gass 2015). This research is based on
the state of mobile banking fraud in the context of South Africa. For the case of this
research, an effective sampling strategy will be followed for collecting and
analysing the data in an appropriate manner. For quantitative research, survey will
be conducted on the customers, who have faced significant issues in the
transaction method. The result of survey will help in getting significant knowledge
about the mobile banking fraud. Effective
9.3 Data collection instruments
Both primary and secondary data collection method will be followed in order to
complete the research in a comprehensive manner. The related articles and
research work will be used as the secondary sources. This will help in getting
relevant information from the research works, which have been conducted on the
same topic. Only authentic information will be used for maintaining ethical standard
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of the research. For primary research, data will be collected from the customers
who have faced significant issues due to the mobile banking fraud.
9.4 Data analysis
Data analysis is defined as the process of evaluating the data and presents them
un a logical manner for the sake of accomplishing the research and thus completes
it within the dead line (Flick 2015). For the case of this research, MS excel will be
used. This will help in presenting the outcome of quantitative research statistically.
Graph will be framed for analyse the data logically.
9.5 Pilot study
Pilot survey is regarded as the small scale preliminary research which intends to
deal with the feasibility, cost, duration and probable outcome of the research
(Ledford and Gast 2018). For the sake of completing the pilot study, qualitative
research will be followed. Two managers will be interviewed to get knowledge
regarding the issue, faced by them due to high degree of mobile banking fraud.
10. Ethical considerations
Initially, the respondents of both the survey and interview will be informed
regarding the main aim of the research. They will be informed that those responses
would only be used for academic purposes. Authority will be given to respondents
to withdraw the research at any point of the research. No undue personal and
objectionable questions will be asked at the time of both survey or interview.
11. Chapter organisation
The study is based on the analysis of mobile banking fraud in the context of Soiuth
Africa. Introduction is the first chapter, which will cover the fundamental aim,
objectives and significance of carrying out the research. In the second chapter, i.e.
literature review, basic concept, factors and impact of mobile banking fraud will be
discussed. In the research methodology chapter, the proper direction of the overall
research will be formed. The chapter of data analysis and data collection chapter
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will cover the analysis and interpretation of the data which will be collected during
the course of the research. In the last chapter, conclusion and recommendations
the complete discussion of the entire research will be presented. Recommendation
and scope of the future research will also be presented in this chapter.
12. Proposed timetable
Figure 1: Time frame
(Source: As created by the author)
13. Bibliography
Abdullaev, A., Al-Absi, M.A., Al-Absi, A.A., Sain, M., Lee, Y.S. and Lee, H.J., 2019,
February. Security Challenge and Issue of Mobile Banking in Republic of
Uzbekistan: A State of Art Survey. In 2019 21st International Conference on
Advanced Communication Technology (ICACT), 7(1), pp. 249-255.
Akomea-Frimpong, I., Andoh, C., Akomea-Frimpong, A. and Dwomoh-Okudzeto,
Y., 2019. Control of fraud on mobile money services in Ghana: an exploratory
study. Journal of Money Laundering Control, 8(3), pp. 89-120.
Businesstech.co.za. (2019). The safest ways to bank in South Africa – online vs
mobile vs app. [online] Available at:
https://businesstech.co.za/news/banking/275355/the-safest-ways-to-bank-in-south-
africa-online-vs-mobile-vs-app/ [Accessed 12 Sep. 2019].
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a
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research project. Sage.
Hassani, H., Huang, X. and Silva, E., 2018. Digitalisation and big data mining in
banking. Big Data and Cognitive Computing, 2(3), pp.18-26.
Kar, A., Bhattacharyya, S.D., Perez, K. and Williamson, G., Mastercard
International Inc, 2015. Method and system for proximity fraud control. CRC Press.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage
Publications Limited.
Lakshmi, K.K., Gupta, H. and Ranjan, J., 2019, February. UPI Based Mobile
Banking Applications–Security Analysis and Enhancements. In 2019 Amity
International Conference on Artificial Intelligence (AICAI), 5(3), pp. 1-6.
Lande, R.S., Meshram, S.A. and Deshmukh, P.P., 2018, August. Smart banking
using IoT. In 2018 International Conference on Research in Intelligent and
Computing in Engineering (RICE), 11(9), pp. 1-4.
Ledford, J.R. and Gast, D.L., 2018. Single case research methodology:
Applications in special education and behavioral sciences. Routledge.
Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and
design. Routledge.
Mwangi, B.J. and Brown, I., 2015. A Decision Model of Kenyan SMEs' consumer
choice behavior in relation to registration for a mobile banking service: A contextual
perspective. Information Technology for Development, 21(2), pp.229-252.
Sundaram, N., Thomas, C. and Agilandeeswari, L., 2019. A Review: Customers
Online Security on Usage of Banking Technologies in Smartphones and
Computers. Pertanika Journal of Science & Technology, 27(1), pp. 120-127.
Van Deventer, M., De Klerk, N. and Bevan-Dye, A., 2017. Influence of perceived
integrity and perceived system quality on Generation Y students’ perceived trust in
mobile banking in South Africa. Banks and Bank Systems, 12(1), pp.128-134.
Veríssimo, J.M.C., 2016. Enablers and restrictors of mobile banking app use: A
fuzzy set qualitative comparative analysis (fsQCA). Journal of Business
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research, 69(11), pp.5456-5460.
Vishwakarma, P.P., Tripathy, A.K. and Vemuru, S., 2019. An empiric path towards
fraud detection and protection for NFC-enabled mobile payment
system. Telkomnika, 17(5), pp.2313-2320.
Appendices
Appendix 1- Questionnaire:
Qualitative questionnaire:
1. Position in the bank hierarchy?
Senior Manager
Middle level Manager
Other (Specify)
2. To what extent do you encounter the following risks as a result of mobile
banking
Not at all
Little extent
Moderate extent
Great extent
Very great extent
4. What kind of measures, taken by the bank to prevent this issue?
Use of one time SMS verification codes together with the normal PIN
Use of one time phone call verification codes together with the normal PIN
Use of bank’s issued SIM CARDS to enhance
Use of firewall to block network
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Quantitative questionnaire:
1. Which category of the banks do you consider as most technologically
advanced?
a) Public sector bank
b) Private sector bank
2. Which attribute of the bank do you value the most?
a) Quality of Service
b) Technology used
c) Trust
d) Location
3. Customer level of usage of technology
a) Connected to the Internet at home or work to do their financial transactions
b) Credit card service
c) Online banking services
d) E – payments
4. How frequently do you use the following banking services per month?
a) 1 to 3 times
b) 3 to 8 times
c) 8 to 12 times
d) Above 12 times
5. How much you are satisfied with the usage of technology?
a) Extremely satisfied
b) Satisfied
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c) Neutral
d) Dissatisfied
e) Extremely dissatisfied
6. Problems you are facing due to technology usage in the banks.
a) Cards get blocked
b) Confidentiality of the bank.
c) Online filling
d) Security for ATMs
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