14 July 2018

Kenya: Two Kenyan Banks Lose $0.86 Million to Hackers in a Month

Kenyan banks are believed to have lost at least $860,000 to hackers in the past one month, which has seen two lenders temporarily terminate their mobile and online banking services.

The EastAfrican has learnt that one of the banks was last hit month hit as hackers, who attempted to move $1 million from its systems. The bank managed to recover $630,000. It was targeted again last week with a $120,000 hit, of which it has recovered only half.

"These monies were moved out via the mobile money and the online platform that have since seen the services temporarily suspended as the bank does a systems audit and upgrade," The EastAfrican was told.

The hackers are also reported to have stolen $910,000 in the third week of June from a second bank through its internet banking system, but the bank managed to recover $500,000.

"The hacking happened via the Internet banking platform between 5pm and 7pm on June 21, but the bank detected this and acted swiftly to avert further losses," This too saw the bank's mobile money banking platform shut down.

Cause panic

The Kenya Bankers Association chief executive officer, Habil Olaka, refuted the reports of the hacking, saying they were meant to cause panic in the banking sector.

"However, we are not saying that we are safe. I think hacking is something topical and a threat not just in Kenya but worldwide. However banks are moving ahead of the hackers by putting in place safeguards and security arrangements through continuous review of their systems," Mr Olaka said.

A recent Kenya financial transaction fraud study by technology specialist Myriad Connect linked the increase in financial fraud to the rapid adoption of technology in the country's financial markets.

In September last year, Kenyan banks confirmed a cyber attack on their inter-bank transfer platform PesaLink, but said neither cash nor customer data was lost or stolen.

The platform is owned by lenders' lobby group Kenya Bankers Association, and moves an average of $500,000 daily.

"While financial service transaction fraud is a global issue, Kenya has been a leader in the adoption of mobile and digital payments, which unfortunately brings with it a growing risk of fraud. Such fraud in Kenya is costing banks millions of dollars and customers their life savings," Fabien Delanaud, the general manager, said as he announced the firm's entry into Kenya.

Integrated Payments Service Ltd (IPSL), the operator of PesaLink, which is jointly owned by banks, said it had nipped in the bud a hacking attempt into the low-level real-time gross settlement channel.

"We write to confirm that an attempt to again access to the PesaLink platform was recently intercepted. Our cyber security team successfully managed to trace and stop the transactions in close collaboration with the banking partners," said Jennifer Theuri, chief executive of IPSL.

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