On 2018-11-20, Kenya Commercial Bank disclosed that fraud cases reported to the lender rose sharply in the previous year, and the fallout included the dismissal of 34 workers.
In its sustainability report, the bank said it recorded 27 fraud cases in 2017, up from 22 cases in 2016. It also said 401 fraud incidents succeeded during the period under review, while 173 attempts were stopped.
KCB, which is Kenya’s biggest bank by asset base, framed the rise in fraud as part of a wider security challenge facing financial institutions as technology expands access to banking services.
“For as much as technology has simplified our world, it has also brought with it important security-related challenges,” the lender said in the report.
It added: “It is, therefore, imperative KCB continues to meet these challenges head-on by installing, monitoring and constantly upgrading our state-of-the-art security systems to safeguard the integrity of our systems and our customers’ personal data.”
Wider banking fraud pressure ¶
The disclosure came at a time when Kenyan banks were reporting more mobile and online banking fraud, driven by the growth of digital transactions.
One media report said local banks had lost at least Sh86 million to hackers in a single month, forcing two lenders to temporarily shut down their mobile and online banking services.
National Bank of Kenya said it lost Sh29 million to fraud, but maintained that its monitoring and security team had stopped the scheme.
According to the bank, unknown people accessed several accounts, moved money out before detection, and the accounts were later frozen.
Elsewhere, a Diamond Trust Bank branch manager was suspected of stealing Sh25 million from customers’ fixed deposit accounts, while Family Bank lost Sh1.5 million from customer accounts through SIM swaps.
The KCB figures underscored how employee-related fraud and digital banking abuse were becoming a growing risk for lenders, even as banks invested more in internal controls and security systems.
