Absa Bank loses Sh107 million to fraudsters

Absa Bank along Muindi Mbingu Street in Nairobi. FILE PHOTO | EVANS HABIL | NMG

By KEPHA MUIRURI More by this Author

Absa Bank Kenya Plc has disclosed the loss of Sh107.7 million to fraud last year, highlighting the prevalence of the crime in Kenya's financial sector.

The bank said its internal interventions to minimise the fraud risk led to a recovery of more than half of what it lost, after it brought back Sh59.1 million in recoveries.

“Fraud remains a major challenge for the financial sector in Kenya. In line with trends observed in 2021, fraud continues to evolve rapidly and match the increased preference by customers for digital propositions,” Absa noted in its inaugural sustainability report.

“Card-not-present remains the most prevalent form of fraud, followed by cheque fraud and stupefying. Globally, we have noted a trend of bank identification number attacks that impact many cards at the same time resulting in breaches on customer cards.”

To counter fraud, the bank says it undertook a consumer and employee awareness campaign through messaging and sent out 12 SMS alerts to customers last year alongside four social media fraud awareness campaigns.

“1,277 colleagues attended fraud training in 2022 as we support their capacity to respond to fraud. Training covers several aspects including fraud risk management, prevention, detection, response and trends. In total, 18 training sessions were conducted. Colleagues are also encouraged to report any unethical behaviour,” Absa added.

Card-not-preset fraud refers to a type of credit card scam in which a customer does not physically present the card to the merchant during the fraudulent transaction.

The fraud can occur with transactions that are conducted online or over the phone in which the user only provides credit card numbers.

Absa Bank Kenya has also disclosed its climate financing portfolio at Sh60 billion on a year to date basis, which comprises Sh1.5 billion ($15 million allocated for smart agriculture and Sh25 billion allocated for climate finance and Sh15.2 billion disbursed through Timiza to support financially excluded groups.

Climate financing

The bank targets increasing its portfolio and capital allocation to climate financing by at least 10 percent by 2025.

The bank notes it has committed to diversifying its portfolio and increasing its funding and capital allocation to initiatives that support renewable energy and clean energy, industries, innovation and infrastructure, financially excluded groups, sustainable cities and communities, responsible consumption and production and value chains.

Other sustainability targets set by the bank include investing in training and upskilling future skills and competencies of employees, increasing the proportion of women within all levels and assessing and managing indirect environmental and social impacts.

Additionally, the lender has set out to increase diversity in the supply chain, focusing on women, youth and persons with disability.

At the end of 2022, the bank supported a network of 2070 employees, 83 branches and 196 ATMs.

→ kmuiruri@ke.nationmedia.com