Postbank enlists cybersecurity technology to combat multimillion-rand grant payment fraud

• Postbank said changes to its systems were needed to avoid rampant fraud. 
• Postbank and Minister of Communications and Digital Technologies Mondli Gungubele gave an update on the measures taken to resolve the grants payment structures. 
• Gungubele reiterated that the fired Postbank board was embroiled in poor governance.

A two-month, R90 million looting spree of social grant money necessitated the use of cybersecurity technology to reinforce Postbank's systems and to prevent future fraudulent activities. 

At a briefing in Tshwane on Thursday, Postbank chief executive Ntomboxolo Mbengashe expanded on the parliamentary briefing she gave on Wednesday.

She had told the portfolio committee on social development that the "technical glitches", which led to the more than 600 000 old-age grant recipients getting their monthly R2 080 late, followed systems changes recommended by financial firm KPMG.

KPMG had unearthed nearly R90 million stolen in October and November 2021 through fraud. 

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The state-owned Postbank, which falls under the communications and digital technologies department, is contracted by the South African Social Security Agency (Sassa) to distribute social grants to more than 18.2 million beneficiaries.

Mbengashe on Thursday said that not only did Postbank have to change its technical systems to avoid fraud, but it also removed several officials at the bank who had enabled the siphoning of money. 

"What we have done with the information we have [received] from KPMG's recommendations is that there were people who were suspended and disciplined," Mbengashe said. 

She added:

 Mbengashe was speaking at a briefing hosted by Communications and Digital Technologies Minister Mondli Gungubele.

Gungubele said that, two weeks from the beginning of the new grant payment cycle, the government had started preparing "to ensure that we do not encounter challenges that were experienced by our clients in this month". 

Last week, in the wake of the payments crisis, Gungubele fired the entire Postbank board for what he called poor governance, including what the minister said was an illegal R140 million contract the axed officials paid to a software company. 

Gungubele said he did not want to disclose much about the R140 million transaction approved by the former board because South Africa was "a very litigious" country. Still, he stressed that his department would consult lawyers and hold a proper briefing, knowing what could and could not be publicly revealed.  

The minister admitted that the former board had newer members, who only began their tenure in October last year, after the R140 million contract was approved, before being axed last week. 

"But the challenge is [that] they [new board members] stayed here for a year knowing [about the R140 million contract]. So, I don't want to go through the details of that because, again, of a litigious South Africa."