Kenya does not have a good rapport as far as digital fraud is concerned. Multiple industries including banks, microfinance organizations, SACCOs, telcos, and even insurance companies, to mention a few, have reported the infiltration of their systems that led to financial loss.
However, it would appear that these attacks have dropped notably according to a report filed for Q1, 2022. According to TransUnion’s digital fraud analysis that assessed more than 40K apps and websites, the suspected online fraud attempts dropped by 61 percent for the said quarter under review. The numbers go in line with a general drop in the same attempts across the globe at 22.6 percent.
While the numbers can paint a good picture in the whole space of cybersecurity, there were significant shifts in digital fraud per industry. For instance, sectors such as telcos, financial services, and communities like online dating reported a significant drop YoY in attempted digital fraud rate.
Specifically, the financial services industry saw the largest YoY decrease in the suspected fraud attempt rate for digital transactions coming from Kenya, at -71.5%. When some form of fraud did occur, it was pinpointed as application fraud, where applicants gave false/fraudulent information to financial services companies.
Conversely, other industries such as travel, leisure, and gambling saw a jump in online scams.
For instance, the gambling industry showed the greatest YoY growth in the rate of suspected digital fraud coming in Kenya in Q1 2022, at 48.7%, with the most prevalent type of fraud in that sector globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.
The travel and leisure industry experienced the second highest YoY increase from Kenya, at 25.1%, where fraudsters look to take advantage as the sector opens up and Kenyans start traveling again.
Here is a summary of Kenya’s performance compared to global trends:
|Industries Affected by Fraud||Kenya||Global|
|Travel and Leisure||+25.1%||+13.3%|
|Communities (online dating, forums, etc.)||-4.3%||-6.1%|
“What we observed in Kenya and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities,” said Amritha Reddy, Head of Fraud at TransUnion South Africa.
“What’s critical is that companies don’t become complacent with fraud prevention measures as fraudsters become ever more sophisticated. At the same time, companies should leverage this temporary shift in fraudulent activity to focus on optimizing customer experience without compromising security.”
“As digital fraud rates stabilize in Kenya during a period when fraudsters are searching for new vulnerabilities, it’s important that organizations shift their focus to identifying more of the ‘good’ customers and transactions to drive revenue and customer lifetime value. By reducing false positives, false declines, and manual review rates, organizations can improve their customer experience through trusted connections while still keeping the fraudsters at bay,” said Reddy.