Kenyan banks are increasingly employing artificial intelligence (AI) to monitor their employees as part of a comprehensive strategy to combat fraud in the sector.
This is according to the Central Bank of Kenya’s bank supervision 2023 annual report released recently.
This advanced technology, the report says, is helping banks detect suspicious activities and potential security breaches, ensuring the integrity and safety of banking operation, in a time the sector is facing growing challenges related to fraud.
AI systems are known to analyze vast amounts of data in real-time, identify patterns, and flag anomalies that might indicate fraudulent behavior. This includes monitoring transactions, employee activities, and communication channels.
Commercial banks are also using AI to enhance operational efficiency, forecast customer behaviour, and better manage risks, including monitoring staff communications behavior, both online and offline. This includes tracking login times, access to sensitive information, and any unauthorized attempts to alter or access data. The goal is to prevent internal fraud and ensure that employees adhere to security protocols.
Ghana
In Ghana, the Central Bank’s latest Financial Fraud Report indicated that at least 274 workers of financial institutions were found complicit in various forms of fraud leading to a loss of over GHS88 million in 2023.
Per the report, the year before, 188 workers were found complicit and the amount lost them was GHS82 million.
Out of the 274 cases of fraud recorded involving staff in 2023, 211 (77%) were involved in
cash theft (cash suppression), as compared to 140 (66%) staff involved in 2022.
No Manifest Remedies
All the Central Bank did, in the report, was to make recommendations to the financial institutions to address the gaps in their systems and operations to prevent fraud. But no real measures have been announced or witnessed between 2020 and now.
Recently, in Nigeria, some 49 staff of various financial institutions have been sacked for being involved in various kinds of fraud that led to the loss of N42.6 billion (US$26 million).
Kenya is also reporting that banks are now employing AI to monitor staff in particular, as part of the fraud combat effort.
MTN Ghana last year announced that it had established some APIs with banks to ensure that any SIM card swapped cannot be used to exact any financial transaction for at least 48 hours, which is long enough for the owner of the SIM to confirm if indeed he/she did the SIM swap or it was done by a fraudster.
The Bank of Ghana has asked all financial institutions, particularly mobile money operators and payment service providers to ensure that no swapped SIM is allowed to transact until 48 hours had elapsed. Again, the swapped SIM can only be reactivated after the owner had presented proof of ID and liveliness (present for the reactivation).
What the BoG Fraud Report failed to do was to mention what punitive measures have been exacted on the staff found complicit (like in Nigeria), and what measures institutions have actually put in place to prevent fraud (like in Kenya).
