The Central Bank of Kenya (CBK) has released a new report dubbed The Banking Sector Innovation Survey 2021 that has revealed that cyber attacks remain a tangible threat to online banking in Kenya.
The report has revealed that commercial banks in Kenya have identified cyber attacks as a risk to online banking innovation as they continue to embrace digitization. The survey conducted noted that 92 per cent of banks and 86 per cent of microfinance banks identified cyber risks as one of the top three innovation-related risks.
The cyber attacks in banks target data privacy and threaten data security for the bank customers and the safety of their funds. The report also noted that 71 per cent of MFBs and 67 per cent of banks consider third party and vendor management risks as the second top risk to online banking.
CBK noted that due to the increase in cybersecurity fraud incidences, institutions have invested in virtual security, to ensure that online banking platforms are secure for the customers.
According to the report, 92 per cent of the banking institutions have adopted or developed an online banking solution (mobile app or USSD) to assist in delivering services to customers. Only four institutions (two banks and two MFBs) have not adopted or developed a mobile banking solution (app or USSD).
According to the survey, Application Programming Interfaces(APIs), Big Data and Data Analytics, Biometrics Technology, and Cloud Computing are the main innovations considered important by financial institutions.
A recent report by the Kenya Bankers Association noted that nearly six out of every ten bank customers (58.5 per cent) prefer Mobile Banking up from 52 per cent in 2020.
In recognition of the threats to the banking industry and other institutions as far as financial fraud is concerned, KBA has launched an initiative to protect customers against financial fraud. The initiative target players in the financial, payments and retail sectors highlighted the importance of continuing to empower the public with information on fraud prevention. The campaign will be coordinated by KBA in partnership with member banks, card service provider VISA, Retail Trade Association of Kenya (Retrak), Association of Microfinance Institutions (AMFI), PesaLink, Kenya Society of the Blind (KSB), Association of the Physically Disabled of Kenya (APDK) and Consumer Grassroots Association.