Stanchart invests Sh200m in cyber safety


Monday March 20 2023

DNStandardChartered1303 (1)

Chief Executive Officer(CEO) Standard Chartered Kariuki Ngari during an investor briefing where the 2022 full-year results and strategy updates were announced at Standard Chartered Head office in Westlands Road, Nairobi on March 14, 2023. PHOTO | WILFRED NYANGARESI | NMG

Tier one lender Standard Chartered Bank Kenya has pumped in Sh200 million towards enhancing its cybersecurity systems, as banks continue to battle increasingly sophisticated digital fraud attempts on customer accounts.

The lender said last week that it has mainly invested in improving its authentication processes for clients using its digital payments platforms, running awareness campaigns and in artificial intelligence to detect suspicious activity.

Banks have adopted mobile and digital products as an efficient and cost-effective way of reaching customers and growing market share.

Read: Prevention of cyber threats is ultimately the best cure

This has, however, exposed them to cyber-attack risk, exposing them to the loss of customers’ deposits and savings to online fraudsters.

“Cybercrime is going to be the biggest challenge in the financial sector for many years to come—we are using a lot more technology, so that is not an area in which we can slow down. Educating the client on this is important,” Stanchart’s chief executive Kariuki Ngari said.

Kenya’s highly digitised economy, linked with mobile money through telcos and banks, has made the country a target for cybercrime and online fraudsters, with lenders losing hundreds of millions of shillings annually to hackers.

Cases where links are widely circulated promising free airtime, money and other products have been used in phishing attacks to collect personal data and use it to siphon cash.

Criminals also send out legitimate-looking emails from trustworthy websites requesting personal and financial details from unsuspecting people, fooling them into submitting personal or financial data and passwords.

In 2017, the Central Bank of Kenya (CBK) developed cybersecurity regulations for the banking sector, which required lenders to formulate policy, strategy and a framework to fight the crime.

Most banks, however, do not reveal the level of fraud and cyberattacks they face and the losses on these occasions, unless the cases land in court.

This is because of the reputational risk involved for them in the eyes of depositors, who bank with them based on trust that their funds are safe.

This has informed the increased vigilance by lenders against fraudsters, and higher investment in customer awareness campaigns which involve short text messaging, emails, media adverts and social media posts.

Read: Demand for cybersecurity experts grows on attacks

Stanchart said last year, it sent over 4.7 million text messages to its customers in a fraud awareness drive.

The lender has also initiated multifactor authentication for digital access to customer accounts.

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Beryl Onyango

Beryl Onyango is a CPA and economics degree holder who has dedicated her career to helping others navigate the complex world of finance. Beryl has spent the past 3 years working as a finance specialist in a fintech company and has 6 years of experience in finance, working with a diverse range of clients and industries. Beryl's expertise lies in budgeting, saving, investing, and retirement planning, but she also has a deep understanding of various other areas of finance. She is interested in financial technology and how it changes how we manage our finances. As a finance writer, Beryl has been sharing her insights and knowledge through her writing, covering various finance and personal finance topics. Her goal is to educate and empower individuals to take control of their finances and achieve their financial goals. In addition to her professional experience, Beryl is a lifelong learner, always seeking to expand her knowledge and stay up-to-date with the latest developments in finance. She is also a strong communicator, able to explain complex financial concepts in a clear and easy-to-understand manner. Beryl believes that financial literacy is the key to achieving financial success, and she is dedicated to helping others achieve their financial goals.

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