Concerned with rising cases of theft, banks are now setting up stringent checks for existing and new employees.
Lenders are now shifting attention to their employees to stem cases of staff colluding with outsiders to commit fraud.
As a silent rule, most banks do not openly disclose amounts of money lost through fraud.
Commercial banks are now widening the scope of employee background checks in a bid to get a handle on the wave of fraud-related cases instigated by staff.
Concerned with rising cases of theft, banks are now setting up stringent checks for existing and new employees to prevent cases of fraud as more players in the sector turn to digital banking.
Kenya Bankers of Association (KBA) chief executive Habil Olaka said lenders are now shifting from just paying attention to know-your-customer checks to their employees to stem cases of staff colluding with outsiders to defraud their employers or customers.
“There is a lot of vetting that now goes on in the sector to get due diligence on employees... There are a number of checks you now have to consider and cross-check with the information provided to confirm that you actually understand the employee that you are bringing on board,” said Mr Olaka.
The new KBA stance comes at a time when three Family Bank employees have been charged with stealing more than Sh20 million from its Ruiru branch.
Other lenders that have recently fallen victim of theft include KCB #ticker:KCB, Equity #ticker:EQTY, Cooperative #ticker:COOP and Habib Bank AG Zurich.
As a silent rule, most banks do not openly disclose amounts of money lost through fraud or cases of frustrated fraud for fear of triggering a customer run on deposits.
“We are putting more emphasis on this (vetting) at the beginning of employment,” said Mr Olaka.
He disclosed that banks are now using a strict checklist of know-your-employee to lower the probability of fraud.
