The rate of digital fraud originating from Kenya dropped by 60.9 per cent in the first quarter of 2022 as companies enhanced safeguards.
TransUnion’s digital fraud analysis shows the rate of decline in Kenya was almost thrice the global average of 22.6 per cent and the second highest globally after Rwanda's 61 per cent.
According to Amritha Reddy, head of Fraud at TransUnion South Africa, fraudsters are constantly seeking new opportunities based on vulnerabilities.
''What we observed in Kenya and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures,'' Reddy said.
The firm says, as digital fraud rates stabilise in Kenya, it’s important that organisations shift their focus to identifying more of the ‘good’ customers and transactions to drive revenue and customer lifetime value.
''By reducing false positives, false declines and manual review rates, organisations can improve their customer experience through trusted connections while still keeping the fraudsters at bay,” the report reads in part.
According to the survey, fraudsters have cycled through certain industries during the pandemic and are now rotating to other vulnerable sectors.
For instance, the financial services industry which recorded high cases during the Covid-19 pandemic has covered its tracks, recording the largest annual decrease in suspected fraud attempts.
The fraud rate in the sector dropped 71.5 during the review period after lenders intensified surveillance.
In 2020, the sector accounted for 40 per cent of 56 million cyber attack attempts reported as it turned to digital transactions to curb the spread of the virus.
When digital fraud in financial services did occur, TransUnion found the most dominant type in that industry globally was first-party application fraud.
''That’s when an individual completes fraudulent applications that contain intentionally inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract,'' the report says.
The gambling industry exhibited the greatest year-on-year growth in the rate of suspected digital fraud coming in Kenya during the period at 48.7 per cent, with the most prevalent type of fraud in that sector globally being promotion abuse.
According to the report, users abused site promotions such as refer-a-friend, reload deposit bonuses, and free giveaways.
The travel and leisure industry experienced the second highest year on year on year increase from Kenya, at 25.1 per cent, where fraudsters look to take advantage as the sector opens up and Kenyans start traveling again.
Generally, most countries in Africa reported a decrease in fraud attempts. The drop was, however, lower in South African countries of Namibia, Zambia and South Africa at seven, 13 and 26.6 per cent respectively.
However, attacks tremendously increased in developing countries led by the UK at 85.2 per cent followed by India at 71.4 per cent.
Cyber attacks on Kenyan organisations rose by nearly 50 percent in 2020 compared to the previous year.
This came at a time when organisations adopted remote working systems as well as e-commerce tools amid Covid-19 lockdown measures.
The Communications Authority of Kenya (CA) data shows that more than 56 million cyber threats were detected nationwide in comparison to 37.1 million in 2019.
“A majority of the threats were malware attacks at 46 million, followed by web application attacks at 7.8 million while 2.2 million Distributed Denial of Service (DDos) threats were detected during the same period,” the CA said in a statement.
