The Kenya Deposit Insurance Corporation has stepped up surveillance on banking institutions after it invested Sh229 million ($2 million) in a modern system for collecting and analysing data on the industry.
KDIC—the agency which manages the deposit insurance scheme for customers — says its data warehouse will go live in less than a year, boosting early detection of suspicious financial transactions and malpractices that could lead to the collapse of a bank.
“The data warehouse will help in mitigating bank failures because we will get data timely, analyse the data and it can quickly inform corrective decisions from some of the data,” chief executive Mohamud Ahmed Mohamud said.
“It is a proper value addition because even banks will be more careful on the kind of data they are going to feed in there. It can, for example, quickly pick for you if there are misalignments in the data which you may not see with naked eyes.”
KDIC is among state agencies with powers to monitor financial institutions and detect any suspicious financial transactions and financial malpractice. Others are the Central Bank of Kenya — the financial services regulator — and the Financial Reporting Centre, the anti-money laundering agency.
Recent bank collapses – including Dubai Bank in August 2015, Imperial Bank in October 2015 and Chase Bank in April 2016 – have been a result of fraud and insider dealings.
“All data from the banks will now be deposited in that electronic data warehouse to ensure its integrity, accuracy, and timeliness,” Mr Mohamud said.
“This is something that will be a game-changer for us so that at a click of a button we can get whatever data we want.”