As the public sector reels from mega-scandals, private companies are wrestling with their own devil — fraud.
Experts
conservatively estimate Kenya’s banks are losing Sh1 billion a year to a
new breed of employees who are hungry for flashy lifestyles, but are in
too much of a hurry to save up for them.
That
generation is itching to drive that souped-up Subaru today, not tomorrow
and no morality or loyalty is going to stand in their way.
They
want to live in that trendy apartment in a prosperous address of the
city and they can’t see why it cannot be done without breaking a sweat.
Hard work, or robbing banks physically, they will tell you, are so
yesterday.
They imagine themselves clad from head to
toe in Gucci and flying out for holidays with the girls. Or driving
around the city in convertibles, the wind in their hair, dark glasses
insulating them from envious eye contact with a mass of people they
regard as clueless.
This is the generation that fleeces
Kenyan banks and other businesses of about a billion shillings annually
to finance a lifestyle that has been thrust on them by peer pressure,
if not unbridled ambition.
Most of them work in banks
or the financial departments of big businesses where their information
technology skills are indispensable.
They transfer
billions of funds to offshore accounts for customers and run complex
inter-bank settlements and forex transactions.
DUMMY COMPANIES
Ordinarily,
such skills should advance the ease of transactions and the security of
bank accounts, but they are now being used to skim hundreds of millions
of shillings from fat accounts.
The more careful ones
will even register dummy companies of their own from whose accounts the
loot is swiftly withdrawn to buy that Subaru or Audi, or moved around
the world in zero time at the click on an icon.
Kenya
Commercial Bank CEO Joshua Oigara agrees fraud is fed by the desire for
higher lifestyle and peer pressure commonly associated with young people
who are the majority of bank employees today.
“Fraud
is certainly not a new thing and the statistics you see only show that
corporates are now much more willing to talk about them,” says Mr
Oigara.
But in spite of vigorous background checks and
training on ethics and fraud prevention, young employees are frowning on
traditional career virtues that encouraged gradual growth, he said
It
is a serious case of the park keeper shooting the rhinos. According to
Mr Oigara, “Close to 40 per cent of fraud cases in our bank were
directly perpetrated by employees, while another substantial portion
involved collusion with external players”.
He told the
Nation that the bank last year experienced fraud cases involving Sh300
million. Slightly over half of these were successful while the rest were
prevented.
And, according to Mr Muniu Thoithi, an
advisory partner and forensics leader for East Africa with
PricewaterhouseCoopers, a global survey by the firm is “very telling”.
From
that survey, he said, 66 out of 124 responding organisations reported
having suffered economic crime of one nature or the other.
Out
of the ones that reported having suffered, 70 per cent indicated the
impact was in the region of about $100,000 (about Sh9 million) or less.
Twenty-five per cent of those indicated the impact was in the region of
$100,000 to $5million (Sh9m-Sh450m).
Only a small percentage, about three per cent, indicated having suffered an impact in excess of $5 million (Sh450m).
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