Kenya: Banks Plan to Share Data On Fruadsters

Banks have started a data bank specifically targeting habitual fraudsters, as the industry starts to collaborate on fraud and money laundering prevention tactics. "We want to create a database for fraudster information that will be accessible by all financial institutions so that we are aware," said Commercial Bank of Africa's Head of Security and Investigations Phillip ole Perrio. Perrio was speaking during a half day workshop attended by various banking executives in Nairobi yesterday which was organized by audit and consultancy firm Deloitte and Touche.

According to the banking fraud investigations unit, banks lost more than Sh75 million to fraudsters during the month of May alone.
The banks are taking precautionary steps as they wait for the full implementation of the Proceeds of Crime and Anti Money Laundering Act of 2009.
The banking executives at the workshop were urged to start investing in anti money laundering procedures on their own as they wait on the way forward from the government.
The executives also deliberated on employee involvement in bank fraud cases since in-house fraud has been on the rise lately. According to a report by Deloitte that was released in May titled Fraud in the Kenya Financial Services Industry; most of the bank fraud cases reported to authorities were inside jobs.
The report had cited the real time gross transfer system and the electronic fund transfer as the most common areas of banking operations that such fraudsters use.

Perrio advised banks to ensure they do thorough background checks on their employees before they hire them. "If we are to succeed in fighting fraud it is critical that we ensure that employees buy in to our initiatives in order for them to participate and not be part of the problem," noted Perrio.
The anti money laundering law provides for the creation of a financial reporting centre, among other measures, whereby information on any suspicious transaction is to be given.
Efforts to curb money laundering were made into law last year it is yet to be made operational. Some steps are however being made to realize the full implementation of this law. Last month, Finance Minister Uhuru Kenyatta named 9 people to be members of the advisory board on anti money laundering in the country. Last year, banks started sharing information on serial loan defaulters to reduce the number of bad loans given out.