Tier one lender Standard Chartered Bank Kenya has pumped in Sh200 million towards enhancing its cybersecurity systems, as banks continue to battle increasingly sophisticated digital fraud attempts on customer accounts.
The lender said last week that it has mainly invested in improving its authentication processes for clients using its digital payments platforms, running awareness campaigns and in artificial intelligence to detect suspicious activity.
Banks have adopted mobile and digital products as an efficient and cost-effective way of reaching customers and growing market share.
This has, however, exposed them to cyber-attack risk, exposing them to the loss of customers’ deposits and savings to online fraudsters.
“Cybercrime is going to be the biggest challenge in the financial sector for many years to come—we are using a lot more technology, so that is not an area in which we can slow down. Educating the client on this is important,” Stanchart’s chief executive Kariuki Ngari said.
Kenya’s highly digitised economy, linked with mobile money through telcos and banks, has made the country a target for cybercrime and online fraudsters, with lenders losing hundreds of millions of shillings annually to hackers.
Cases where links are widely circulated promising free airtime, money and other products have been used in phishing attacks to collect personal data and use it to siphon cash. Criminals also send out legitimate-looking emails from trustworthy websites requesting personal and financial details from unsuspecting people, fooling them into submitting personal or financial data and passwords.
In 2017, the Central Bank of Kenya (CBK) developed cybersecurity regulations for the banking sector, which required lenders to formulate policy, strategy and a framework to fight the crime. Most banks, however, do not reveal the level of fraud and cyberattacks they face and the losses on these occasions, unless the cases land in court.
This is because of the reputational risk involved for them in the eyes of depositors, who bank with them based on trust that their funds are safe. This has informed the increased vigilance by lenders against fraudsters, and higher investment in customer awareness campaigns which involve short text messaging, emails, media adverts and social media posts.
Stanchart said last year, it sent over 4.7 million text messages to its customers in a fraud awareness drive. The lender has also initiated multifactor authentication for digital access to customer accounts.