With the rapid growth of Tanzania banking industry in the last decade, incidents of fraud have also increased, not only in the number of attempts but also in sophistication and amounts involved.
The number of banks and financial institutions in the country has jumped to 51, according to the Bank of Tanzania (BoT) statistics, which is a positive sign of the improved business climate that is creating healthy competitions as well as improved financial services.
Similarly, available data show that about 15 per cent of Tanzanians have access to various financial services in the country. Despite the outstanding performance in the financial sector, data from police show that in the past few years, over 1.3bn/- has been stolen across the country through cyber fraud.
In Kenya for example, where the banking industry is more robust, Mr Sammy Kioko, the Alliance Manager, Cyber Security Africa noted last week that more than 5 billion Kenyan shillings are reported to have been snatched by cyber criminals in recent years.
He said the banking Information technology (IT) security threats have remained to be a burning challenge for most financial institutions as well as public organisations in the Eastern and Central African region plunging them into massive losses. This was unveiled in Dar es Salaam over the weekend at a media briefing by Mr Kioko, ahead of the two-day summit of East Africa Banking and IT Security slated for April 24th and 25th this year.
The important features of the banking security issues are electronic bill payment, bank statements with the possibility to import data, funds transfer between a customer’s own checking and savings account, possibility to monitor the accounts and many more.
The major concern of banking security is the possibility of getting exposed to personal theft by way of using a physical bank branch. There is also a general concern that customers’ account numbers can get exposed when disbursing various bills by paper check.
The situation has called upon experts in the IT sector to think of adopting more advanced Europay, MasterCard and Visa (EMV) standards for authenticating card transactions using microchip technology. According to Mr Kioko, the summit comes at a time when system improvements adopted by organisations in the Eastern, Central and the Horn of Africa have proven futile as fraudsters have in recent years been able to siphon larger sums of money.
“The two-day event will help players in the financial sectors, public agencies and other organisations to identify the technical, environmental and business risks that could lead to service vulnerability that weaken consumer confidence and ultimately cause brand damage and serious revenue decline,” he said.
The recent survey conducted in Tanzania, Rwanda, Uganda, Kenya and Zambia last year noted the surging threats like hacking, malicious insiders, card skimming, electronic files manipulation, IT controls circumvention, unauthorized penetration and careless employees.
Speaking at the event, the Director of Information, Communication and Technology in the Ministry of Communications, Science and Technology, Dr Zaipuna Yonah, said there was still lacking a law to govern cyber security necessary for prosecuting manipulators of IT operations.
“There are ongoing technical preparations for the enactment of the law expected to be finalized before end of the year,” he noted. He added that lacking proper IT controls was also contributing to loss of revenues to the Tanzania Revenue Authority (TRA) through the electronic credit payment system.
Some of the key issues to be discussed include the IT security threats, fraud, risk and regulatory matters affecting financial institutions, public and private organisations in their daily operations. The sessions, he added, will deliver ideas to help attendees articulate and implement appropriate risk management strategies, optimise internal processes and ensure that systems and hardware infrastructure are robust enough to mitigate risk, assure consumer confidence and maximize revenues.
The Central Bank reported recently that there were ongoing efforts to contain the situation that currently a joint taskforce was formed to conduct studies on the problem. The taskforce comprised experts from the BoT, Tanzania Bankers Association (TBA), Tanzania Communications Regulatory Authority (TCRA), Financial Intelligence Unit and Cyber Crime Unit in the office of the director of Criminal Investigation. It is expected that the taskforce recommendations would serve as a solution to the problem of cybercrime in order to protect customers from commercial fraud.
Source Tanzania Daily News
