ONLINE SECURITY

Fraudsters eye digital platforms due to easy user manipulation

In Summary

• Mobile and online financial services have been integrated with most banks to payment, loans and savings services.

• A total of 787.8 million transactions including person to person and withdrawals, valued at Sh2.1 trillion were made between October and December 2018.

Tala app, an online financial microlending platform is seen on a mobile phone in this photo illustration
Tala app, an online financial microlending platform is seen on a mobile phone in this photo illustration
Image: REUTERS

Mobile and digital banking services are becoming targets for financial crime facilitated by easier manipulation of users.

While theft has been focused on banks’ ATMs, Kenya Bankers Association chief executive Habil Olaka said fraud trends are also shifting to the digital platforms due to their increased popularity and social engineering.

“Card-related fraud was previously a concern in the industry. However, financial and payment services have experienced a technological revolution over the past decade, to receive challenges that threaten safe transactions across channels,” Olaka said.

The caution on fraud in the digital financial service industry comes at a time when the networks have gained traction and the majority of banks have aligned their business models towards online channels.

A total of 787.8 million transactions including person to person and withdrawals, valued at Sh2.1 trillion were made between October and December 2018.

According to the Communication Authority of Kenya report, there were 586.9 million mobile commerce transactions registered valued at Sh1.8 trillion while the value of person-to-person transfers amounted to Sh731.9 billion.

During the quarter, the number of total active mobile money subscriptions and agents stood at 31.6 million and 223,931 respectively.

According to MasterCard business head for East Africa, Adam Jones, consumer protection and security will be underscored through investment and role play by all merchants, issuers, digital players and other stakeholders in the payment ecosystem.

“Consumers need to experience security, convenience and control promised by the digital revolution,’’ he said.

Mobile and online financial services have been integrated with most banks to payment, loans and savings services.

According to Olaka, the banking industry is devoting more resources towards containing fraud through staff capacity building and customer education programmes.

A week ago, Barclays Bank of Kenya confirmed that Sh11.2 million was stolen from four Barclays ATMs through an organised theft ring.

 “It is important for bank customers to note that the losses incurred will not in any way affect their deposits. This is because the money is insured and the industry is working together to ensure such cases do not arise,’’ he said.

Olaka was speaking during the launch of Kaa Chonjo initiative, that will enable players in the financial and payment services industry including banks, payments solution providers, consumer organizations, retailers and mobile network operators empower consumers with information to secure themselves against fraud-related risks.

The initiative was in partnership with Visa, Retail Trade Association of Kenya, Mastercard, mobile operator Airtel, PesaLink, Consumer Grassroots Association and KBA’s member banks.

“The first point of security begins with how you get customers to the system. There is also a need to invest in human and network resourcing to keep up with the new technology,” Airtel Money director Vincent Wakaba said.