Tricks that crooked bank staffers use to wipe clients’ accounts clean

Kenya Commercial Bank Group CEO Joshua Oigara speaks at a recent function in Nairobi. The desire for lifestyle change is driving some bank workers to fraud, he says. FILE PHOTO | ANTHONY OMUYA |

What you need to know:

  • It’s a new game as the people hired to take care of cash turn into thieves.

  • We have control systems to detect theft and recover lost cash, top bankers say.

Banks used to experience armed robbery incidents in the 1990s, but things have changed.

The difference is in both the script and the cast; the actors are no longer the armed thugs targeting cash on transit.

The very people in charge of protecting the cash, and their accomplices, are the culprits.

Kenya Commercial Bank chief executive Joshua Oigara attributed the trend to changes in career aspirations, the desire for a high lifestyle and peer pressure 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.

“We do a lot of background checks, train our staff on ethics an fraud prevention but the traditional career virtues that encouraged gradual growth are no longer adhered to,” he told the Nation in an interview at his office last week.

Close to 40 per cent of fraud cases were directly perpetrated by employees while another substantial portion involved collusion with external players, according to the KCB boss.

He believes staff fraud should be exposed and legally pursued to discourage others from it.

Last year, the bank experienced attempted fraud involving Sh300 million. Slightly over half of the cases were successful.

Out of the 93 staff who had exited the lender, 40 were associated with fraudulent activities. The bank is handling 30 cases of fraud, including one of Sh40 million, involving three employees.

However, it is concerned by the slow pace of prosecution of suspected staff fraudsters.

WHISTLE BLOWING

The bank has come up with a whistle blowing mechanism with a toll-free telephone line based outside the country to encourage reporting.

“Our staff know each other well and would certainly know when a colleague has strange lifestyle changes that an audit cannot justify.

“We have already begun seeing results. Banks are used to recovery and once we catch anyone, we definitely recover our cash,” Mr Oigara said.

Although he agrees that technology has increased the risk of losing high amounts to fraudulent employees, he says the key control will be in the character of technology users.

He also believes employee terms of service have nothing to do with staff fraud since some of those who steal are very well paid and the bank hires based on a standard collective bargaining agreement.

Commercial Bank of Africa Group chief executive officer Isaac Awuondo has a different view. He says the bank employs very young people below 32 but it has not suffered a significant loss through staff theft.

Technology comes with even higher risks, especially where money is involved, but the bank has created sufficient controls in its systems to detect fraud, he says.

“Access to systems and banking areas are restricted. I don’t even have the rights to log in and view my own account.”

Mr Awuondo also believes that how employers treat staff significantly determines whether they will steal or not.

The bank has experienced some incidents, but to the chief executive, they are insignificant. He points out a case in December 2012, when an employee was involved in a Sh15 million fraud.

“If you steal from us, you cannot go scot-free. We have confiscated his property, which we are almost selling to recover our money,” he says.

Last year, the bank lost slightly above Sh10 million through staff fraud, but Mr Awuondo did not say much about it during the interview.