Connect with us

Hi, what are you looking for?


Regional financial institutions lose Sh2.5B to fraud – report


Financial institutions across East Africa are perceived to have lost $30million (Sh2.55billion) in the last one year to financial crime

This is according to findings contained in the Deloitte Financial Crime Survey 2013 which asked banks, insurance firms, real estate companies and the capital markets across East Africa to state what they felt they lost to fraud and other crimes.

“These figures are likely to be significantly understated given that a majority of players in the financial services industry opt not to report incidences of financial crimes, which may have a bearing on the perception of their prevalence and impact in the industry,” said Robert Nyamu, Director, Deloitte Forensic Services, East Africa

“Coincidentally, across the region, the greatest impacts of financial crimes are perceived to be reputational damage and actual financial losses.”

The most prevalent forms of financial crime across East Africa are cash theft, cheque fraud and asset misappropriation at varying levels across the three countries, which is a reflection of differing degrees of complexity and maturity of the financial services industry in each country.

Nearly 70 percent of the financial crimes committed in East Africa last year were through cash theft.

Cheque fraud was highest in Uganda—where it accounted for half of the financial crimes, followed closely by Kenya.

On average, a third of financial crimes across East Africa were in the form of asset misappropriation.

Execution of financial crimes in East Africa commonly involves a combination of internal and external parties through collusion, which has perpetually proven to be effective at compromising internal controls.

Advertisement. Scroll to continue reading.

Non-management personnel are perceived to be the biggest culprits of financial crimes

“The most commonly used prevention mechanisms for mitigating financial crimes are segregation of duties and job rotation, while the most commonly used detection mechanism across the region is risk based internal audits,” said Mark Anley, Director, Deloitte Financial Crime Advisory Services, South Africa.

The majority in Kenya and Tanzania perceive the internal audit team and senior management as the most responsible parties with respect to dealing with financial crimes, while in Uganda this responsibility is perceived to rest with the risk and compliance teams and senior management.

Gallant efforts have been made by financial services industry across East Africa.

“These efforts notwithstanding, both the magnitude and pervasiveness of financial crimes have progressively increased” said Nyamu.

“We believe that this can be attributed to a mismatch between the level of sophistication of the financial crimes and the tools and techniques being deployed by the Industry players to contain these vices”

As opposed to last year’s report which analyzed reported figures, this year’s survey—in which 32 companies stated—depended on the responses of the institutions on what they felt or perceived were the amounts they lost to financial crime and the best way to curb the vice.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...