Fraud has in the recent past incrementally found its way to the path of least resistance transaction channels such as mobile money leading to hefty losses of revenue, survey findings by Myriad Connect shared during the Fintech Summit 2018 shows.
The study established that fraud in Kenya continues to be a major key performance indicator (KPI) for Financial Services. The findings reveal that 90 percent of CIOs strongly agree that fraud is a key challenge facing the industry.
In a report, Myriad Connect noted that 82 percent of CIOs stated that addressing fraud is a business-critical priority while 95 percent of CIOs in Kenya confirmed that they are targeted to reduce fraud in their organizations.
As financial service authentication specialist, Myriad Connect commissioned the research into the market to better understand the incidence of fraud and how it is committed to addressing it in Kenya. Fabien Delanaud, General Manager Myriad Connect, shared the results from this research.
While covering the key findings, Delanaud sought to engage the best minds in technology to address the need for omni-channel fraud prevention and a heightened focus on security to create superior digital financial services.
“Although, the success of financial technology has had a transformational impact across the continent, enabling financial inclusion and driving economic growth, it has also come with negative impacts,” said Delanaud.
While, Africa’s Fintechs are on course to continue to fuel further growth and innovation, Delanaud stressed on the need for both organizations and by extension individuals to tame fraud that is facilitated by disruptive payment tools like mobile money, mobile payment wallets and one click transactions.
Although mobile transformation in Africa has continued to give positive indicators in the economy backed-up by the strength of its successful rollout, there’s need for Africa to lead in taming fraud through mobile money, “stressed Delanaud.
While mobile technology continues to deliver innovation and growth, it has also presented fraudsters with opportunities to exploit weaknesses in systems to defraud customers – the more we advance with digital technologies, the more vulnerabilities we incur.
Findings by Myriad Connect’s show that the global financial service transaction fraud experiences someone in the UK is defrauded in every 15 seconds while, an average of 1.8 billion card fraud losses is experienced in Europe. United States of America had 22 percent increase in online fraud attempts in December 2017 while Brazil experienced 3,600 fraud attempts per minute.
The report further stated that 57percent of consumers said that they have been victims of SMS-phishing while 74% of financial institutions in Kenya use one-time-password (OTP) via SMS. An average of 90 percent of Kenyan Banks identified SIM swap fraud as a serious issue.
In US, the National Institute of Standards and Technology (NIST) issued an elaborate guidance on SIM Swap after establishing SMS as insecure and no longer suitable as a strong authentication mechanism.
Myriad Connect further findings revealed that 83 percent of Kenyan’s would leave their bank or mobile money provider if they felt they didn’t do enough to protect against financial fraud while 92 percent of Kenyans would move bank or mobile money provider for a provider who offers a more secure service to protect them against fraud. An average of 80 percent of those interviewed said they’d be prepared to pay a small fee to prevent fraud on transactions.
With the right fraud prevention measures in the UK 67 percent of fraud was recently stopped which translated to preventing £751 million from digital fraudsters on the payment platforms.