In a recent disclosure, Absa Bank Kenya revealed a substantial financial setback, losing KSh 107.7 million ($716,566) to fraudulent activities during the year 2022. However, the bank’s proactive measures to mitigate fraud risks proved effective in recovering KSh 59.1 million ($393,213) of the total losses.
Absa Bank’s strategy to combat fraud included a multi-pronged approach. It executed four comprehensive social media awareness campaigns aimed at educating the public about the perils of online fraud. Furthermore, a consumer and employee awareness initiative, conducted via messaging platforms, was implemented in the previous year. The bank also took the proactive step of sending out 12 SMS alerts to customers, creating an additional layer of protection against fraudulent activities.
Despite these efforts, the issue of fraud remains a persistent challenge within Kenya’s financial sector. Research indicates that online fraud incidents in Kenya surged by a staggering fivefold in 2020. The landscape of fraud is continuously evolving, in line with trends observed in 2021. This evolution closely correlates with the increasing preference among customers for digital financial services and solutions, as highlighted in Absa’s inaugural sustainability report.
Card-not-present fraud remains the most prevalent form of fraudulent activity, with check fraud and stupefying scams following closely behind. Card-not-present fraud refers to a subset of credit card fraud where unauthorised transactions occur without the physical presence of the customer at the point of purchase. This type of fraud mainly targets transactions conducted over the phone or online, where users provide their credit card details without presenting the physical card, rendering them vulnerable to fraudulent activities.