Financial Crime World

Uganda’s Commercial Banks Lose UGX 5.9 Billion to Cyber Fraud: Experts Warn of Growing Threat

Kampala, Uganda - In a shocking revelation, Uganda’s commercial banks have lost a staggering UGX 5.9 billion to cyber fraud in the last quarter of 2022. The threat is growing and becoming increasingly sophisticated, with experts warning that local banks are not doing enough to combat cyber threats.

Cyber Fraud on the Rise

According to a recent report by Smile Identity, cyber fraud rates in sub-Saharan Africa rose to an all-time high of 28 percent in 2022. Uganda was no exception, with hackers exploiting weekends and public holidays to launch attacks when banks are most vulnerable.

Expert Insights

  • “Electronic fraud is increasing by the day in terms of percentages,” warns Wilbrod Humphreys Owor, executive director of UBA.
  • “The internal threats are occasioned by people and not necessarily the systems,” said Tumubweine Twinemanzi, executive director of supervision at the Bank of Uganda. “We are doing badly on cyber threats from inside out.”
  • Sarah Arapta, chairperson of the Uganda Bankers’ Association, urges banks to come up with a framework supported by regulation to deal with cyber fraud.

The Need for Stronger Penalties and Investigative Processes

The report highlights the need for stronger penalties and more robust investigative processes to combat cybercrime. Uganda’s reliance on colonial-era legal frameworks is seen as inadequate in addressing the growing problem of cyber fraud.

Recommendations

  • Banks must develop a framework supported by regulation to deal with cyber fraud.
  • Stronger penalties are needed to deter cybercriminals.
  • More robust investigative processes are required to effectively combat cybercrime.
  • Public awareness and sensitization are key to reducing cases of cyber fraud.

The Way Forward

Experts agree that sensitisation and public awareness will be crucial in reducing the mushrooming cases of cyber fraud, which has become a major concern for commercial banks in Uganda. It is essential that banks take proactive measures to combat this growing threat and protect their customers’ sensitive information.