Kenyan banks lost KSh1.5 billion (approximately US$17.64 million) over the last year, with only a third being recovered by investigators.
The East African reports the Central Bank’s Banking Fraud Investigations Department (BFID) blames tech-savvy employees for most of the loss, with just KSh530 million (US$6.2 million) being recovered.
A big portion of the money is reported to have been lost in the period between November last year and April 2013, when KSh952 million (approximately US$11.2 million) disappeared, of which only KSh345 million (US$4.05 million) was recovered.
Security experts estimate only a small portion of the lost amounts was declared, and that the true figures could be a lot larger.
According to the newspaper, an unnamed director said the true number could be more than triple the amount declared.
“Of all the risks, reputational risk is the worst. Most banks would rather keep cases of attempted fraud or actual fraud under wraps to avoid the damage disclosure would do to their reputation. Most of these cases involve bank employees,” a security director at a top financial institution told the East African.
They say that these numbers show the need for financial institutions to invest in protective cyber security mechanisms, with cases of identity theft, electronic funds transfer, document forgery, bad cheques, credit card fraud, loan fraud and online fraud on the increase.
Financial institutions are also in the spotlight, with recurring cases of banks not making any effort to patch up the cracks in their systems.
