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Stanbic warns bank customers of spike in midnight fraud
Many of the reported fraud cases are of social engineering, whereby customers, who use digital wallets such as bank apps, are deceived into disclosing confidential information like passwords.
Stanbic Bank Kenya has issued a wake-up call to customers about the rising wave of late-night fraud, where unsuspecting revellers are tricked into revealing their passwords.
According to the lender, many of the reported cases of social engineering, whereby customers are deceived into disclosing confidential information, occur at midnight.
Head of personal and private banking at Stanbic Bank, Abraham Ongenge, said on Tuesday, the incidences tend to happen on Friday and Saturday night, with millennials —individuals born between 1981 and 1996— being the most hit.
These disclosures offer a sneak peek into the shifting mindset of fraudsters as they attempt to take advantage of customers in social joints, many of whom use digital wallets, such as bank apps and mobile money to make payments.
“We are seeing a lot of fraud attempted on digital channels through some form of social engineering. The consequence of that is that a lot of customers are losing money through these social engineering tactics like people calling and posing as bank employees and asking for personal information and using it to access accounts,” said Mr Ongenge during the bank’s media engagement session in Nairobi.
“From a volume perspective, millennials are more susceptible to fraud. On the statistics around when it happens, we see many cases happening around midnight, going to 1 am and wondering what sort of activities are happening at that time. The cases also tend to be on Fridays and Saturdays.”
Mr Ongenge said that, after millennials, the next most targeted accounts tend to be those of baby boomers —people born between 1946 and 1964—due to their “significant accumulation” of savings.
The lender says it has been reaching out to customers more frequently to educate them on this trend, advising them on how to protect themselves from fraud in the era of digital transactions.
“It requires us to think differently because the journey of banking has changed. We cannot move out of digital spaces. We have to be more responsible in investing in awareness and technology that allows us to protect our customers,” said Mr Ongenge.
The bank has also been increasingly using customers’ behavioural profiles to prevent potential fraud. For example, it flags card transactions initiated in unfamiliar locations —places the customer has not previously visited— and initiates a follow-up before allowing the transaction to proceed.
Mr Ongenge said that fraud is increasingly infiltrating the corporate sector, with fraudsters impersonating CEOs to deceive companies. He explained that the criminals are sending fake emails that appear to come from bank CEOs, instructing firms to make transactions such as deposits or loan repayments into fraudulent accounts.
“They are changing email addresses and posing as chief executive officers informing companies about change of accounts and asking them to pay out money into those different accounts,” he said.
In response to the rising wave of digital fraud in the banking industry, banks have formed an industry-wide risk forum where they can discuss changing fraud trends and find collaborative ways to minimise such cases.
