Platform confronts employee fraud with ethics monitor

Business Integrity Africa chief executive Grace Wanjohi. PHOTO | SULEIMAN MBATIAH 

By BENARD OGEMBO, BOgembo@ke.nationmedia.com

A software company has entered the multi-billion shilling data security business for organisations, specifically seeking to monitor employee behaviour online.

Business Integrity Africa has developed an ethics database, mainly targeting financial institutions that are the hardest-hit by emerging white collar crimes in which customer deposits are wired out by rogue employees whose online activities have for long remained unmonitored.

The firm’s chief executive, Grace Wanjohi, said dire economic times had put pressure on individuals and businesses, and fuelled an increase in fraud and other criminal activities, adding that companies must improve their internal processes and working cultures to battle this trend.

Ms Wanjohi said criminals were no longer covering their faces and holding up bank cashiers with sawn-off shotguns or masterminding highway robberies.

They have instead found new ways of committing crimes, including cyber-crimes, which they easily get away with and that a database is the best way to tackle the vice.

The database system will keep records of employees conduct to ensure integrity among staff and their employers.

“Fraud among members of staff occurs most of the time, with workers dishonestly making false representation or wilfully fail to disclose information, abuse a position of trust for personal gain, or causes losses to others. We will have a solution for this,” said Ms Wanjohi.

The fraud prevention database would also mark offenders, preventing them from moving from one place to another while conducting their fraudulent activities unnoticed.

“Our database will be made available to any organisation or individual willing to become a member of BIA Ltd,” she said.

“Once registered, you will be able to file proven cases of fraud. We will begin with an employee fraud database and individual/ suppliers fraud database.”

Incorporated in 2014 in response to a demand to fight fraud, Ms Wanjohi says the company has consulted widely with the business community and law enforcement agencies to ensure that the database complies with the law.

According to the Association of Certified Fraud Examiner, a typical organisation loses five per cent of revenue to fraud each year.

It further says more than one third of all organisation have been susceptible to one form of fraud or another, be it misappropriation, misrepresentation, counterfeits, forgery, bribery or corruption.

A survey by PricewaterhouseCoopers (PwC) found that consumer, retail and financial services are the hardest hit globally, with a 49 per cent incidence of economic crime. Kenya was ranked seventh in the world among countries with the highest incidence of economic crimes.

A KPMG Africa fraud barometer in 2012 showed fraud cases according to regions, with Nigeria, South Africa and Kenya topping the list. The most common offenders are business people, employees and government officials.

Ms Wanjohi said this can be quite frustrating in terms of cost, lost reputation, reduced productivity, lost revenue and various risks that individuals and organisations are vulnerable to and the perpetual follow ups that always lead to dead ends.

A 2013 publication titled Willis Resilience on how to spot fraudsters at the workplace puts global estimated fraud losses at $3.5 trillion.

These figures not only demonstrate the extent of the problem but also the difficulties that professional organisations, set up specifically to detail the extent of fraud, have in identifying where it exists and the financial losses generated.

For individual businesses, getting on top of this issue presents many challenges.

Ms Wanjohi said BIA Ltd would work with law enforcers and fraud examiners in seeking to realise zero tolerance to fraud in the community.

“The Nakuru regional office agreed to be a trustee of the database due to the sensitive nature of the data we’re collecting from the public,” she said.

The Rift Valley Regional Co-ordinator Mr Orsman Warfa said because the database would be hosted on on the cloud, the regional office must be given a password to access it.

“The company will be required to present to the regional office all log reports that they will be collecting weekly for transparency,” said Mr Warfa.

“The fact that you’re collecting people’s data and biometrics means you have to engage the security agencies because this is a fraud database and crime might occur,” he added.

BIA Ltd has been engaging several businesses to sell the idea and bring them on board before piloting the project. The firm said they would announce their partnership once they finalise a memorandum of understanding (MOU).

“Next time you employ a house-help, buy goods from your suppliers, buy that piece of land or recruit new staff, ensure they are in the database so that you can rest easy and worry about other things,” she said.

Charges for membership registration will be Sh1,000 annually per employee/supplier.

Keen to extend its reach, the firm will be piloted in Nakuru and several surrounding counties before spreading its wings.

Clients registered with BIA Ltd are urged upon detection of fraud to lodge a complaint with the police and obtain an OB (occurrence book number). They can then log on to the portal and input such details for the culprits to be blacklisted and held accountable.

Registered employers will also be required to check with the database as a pre-screening process before hiring anyone or doing business with anyone.

BIA Ltd has also partnered with the Association of Certified Fraud Examiners (ACFE), one of the world’s biggest fraud prevention bodies, with a branch in Kenya, to train clients on how to curb fraud and minimise risks as well as to come up with preventative policies in the various organisations.

“Ours is to check on employees’ work ethics and conduct, just like some organisations check the criminal record databases to see if you have previous offences that may render you unable to work in vulnerable sectors,” said the CEO.

Fresh graduates

The database is also expected to provide a platform for interns to showcase their talents, notably fresh graduates, and will also be a good starting point for majority of job seekers.

Ms Wanjohi boasts vast experience after serving as a board member in various organisations and believes that with the database, the cost of running businesses will reduce, noting that organisations spend a fortune on safeguarding against internal fraud.

The firm’s goal is to first contain internal fraud for more businesses to be opened, especially by the middle class who will create employment as security would be guaranteed.

This will also attract local investors to start businesses in the counties with the assurance that they can employ people with integrity to manage them. The platform will also enable inter-county trading.

For example, a trader in Nairobi can easily buy honey from a farmer in Baringo since the latter’s details are factored in the database. If he or she is a registered member, it would be easier to connect the two.

There will also be less risk, for example, when an individual fails to ship goods that have been paid for, he can be easily traced.