Kenya’s Banks Lose Record Sh1.59 Billion to Cyber Fraud Amid Digital Banking Boom
How hackers turned Kenya’s mobile banking boom into a playground for late-night heists targeting unsuspecting customers
Kenya’s reputation as a trailblazer in mobile money is under fresh scrutiny. Last year, hackers siphoned a record Sh1.59 billion from bank customers, according to a new Central Bank of Kenya (CBK) report, underscoring how rapidly digital banking expansion has outpaced security measures.
The spike is stark: in 2023, losses stood at Sh412 million. Mobile banking bore the brunt of the attacks, with Sh810.68 million stolen—a 344 percent increase from the year before. Late-night fraud, often targeting millennials out socializing, has become the norm, with criminals exploiting unsuspecting customers via phishing, social engineering, and SIM swap schemes.
“Fraud cases more than doubled last year, from 173 to 353,” CBK notes. Card fraud alone jumped 16-fold to Sh263.29 million, while identity theft rose six times to Sh199.08 million. Online banking scams and system hacks added hundreds of millions more to the losses. The total exposure to fraud—funds targeted before recovery—neared Sh2 billion, a threefold increase from 2023.
Banks are attempting to keep pace. They’re investing heavily in technology, from advanced authentication protocols to monitoring systems. But criminals evolve just as quickly. Many institutions now rely on electronic computer crime policies (ECCP), bundled under the Bankers Blanket Bond, and often reinsured internationally due to local capacity limits. Insurance premiums have skyrocketed; large banks now pay up to Sh400 million annually, while coverage for the most extensive losses can exceed Sh10 billion.
Late-night scams illustrate the human side of the threat. Stanbic Bank Kenya reported that fraudsters often call or message customers pretending to be bank staff, nudging them to reveal passwords. The hours are telling: midnight on weekends, when digital wallets are in use at bars, restaurants, or social gatherings, is when hackers strike.
The broader digital landscape is equally alarming. The Communication Authority of Kenya reports nearly 8 billion cyberattacks in the 12 months ending June 2025—more than double the previous year. System-level attacks account for 97 percent of the threats, a figure that leaves financial institutions particularly vulnerable.
Cybersecurity experts warn that as banks expand digital access without parallel investment in robust safeguards, the sector faces a growing operational risk. The CBK’s stress tests earlier this year indicated that even a modest 5 percent success rate in cyberattacks could cost the banking industry Sh2.1 billion to Sh2.9 billion under moderate to severe scenarios.
For consumers, vigilance is now a daily necessity. For banks, the challenge is balancing growth with security—ensuring Kenya’s financial innovation continues without turning the country into a digital crime haven.
Go to TECHTRENDSKE.co.ke for more tech and business news from the African continent.
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