Kenyan banks have lost more than Ksh1.5 billion to hackers in cyber and technology-related fraud, according to the Central Bank of Kenya (CBK), according to the Financial Sector Stability Report 2024.
The report, released in collaboration with the Capital Markets Authority, the Insurance Regulatory Authority, the Retirement Benefits Authority, and the Sacco Societies Regulatory Authority, tracks risks and vulnerabilities across Kenya’s financial system.
According to the report, the number of fraud cases in 2024 more than doubled, rising from 153 in 2023 to 353 in 2024.
Moreover, CBK indicated that cybercrime is a growing operational threat to the financial sector, especially as digitization deepens.
“Cyber risk has become one of the largest concerns for insurers, with the increasing frequency and sophistication of cyberattacks.
The growth of digital transformation the widespread use of sophisticated technologies, and the rising value of data and intellectual property make businesses vulnerable to various cyber threats,” part od the report read.
Also Read: Easy Steps to Protect Your TikTok Account from Hackers
How Much Did Hackers Steal?
The value of amounts exposed to fraud also increased from Ksh680.9 million in 2023 to Ksh1.9 billion in 2024.
Out of this, actual losses absorbed by the sector hit Ksh1.5 billion, compared to Ksh596.4 million in 2023. This means banks suffered more than double the losses in just one year.
According to the CBK report, cyber criminals are targeting financial institutions for financial gain.
“The actual loss following attacks rose from Ksh412 million to Ksh1.5 billion during the period, thus impacting negatively on the profitability of banks and ability to build more capital,” added the report.
Hacking is also linked to other weaknesses in the sector, and operational inefficiency and inaccurate assessment of risk are the key challenges for banks and other financial institutions.
Also Read: NSSF Responds to Attempted Hacking of Its Systems
Risks Faced by the Financial Sector
The Financial Sector Stability Report 2024 highlights that insurers face risks such as data breaches, privacy violations, and ransomware attacks.
Other forms of attacks include denial of service (DoS) and distributed denial of service (DDoS) attacks, intellectual property theft, and third-party vendor risks.
The financial and reputational damage from these types of incidents can be severe, affecting both insurers and their customers.
However, the report asks insurers to conduct comprehensive risk assessments and profiling of their IT infrastructure, data protection measures, and incident response protocols to avoid such attacks.
Also, CBK recommends the use of cyber scoring tools, vulnerability scans, and AI-driven analytics to identify weaknesses and respond more effectively to potential breaches.
“Insurers need to conduct thorough risk assessment and profiling of their IT infrastructure, data protection, and incident response protocols using cyber scoring tools, vulnerability scans, and AI-driven analytics.
“The regulator should issue cyber-security regulations and guidelines and require insurers to put in place mandatory cybersecurity programs,” the report recommended.
Follow our WhatsApp Channel and X Account for real-time news updates.
