Fraudulent Transactions Identification Crucial as Kenya’s Digital Credit Market Soars Amid Pandemic

Kenya has emerged as a leader in Africa’s digital credit market, but with the surge in online transactions during the COVID-19 pandemic, financial institutions and businesses are facing an unprecedented threat of fraud. According to Billy Owino, CEO of TransUnion Kenya, robust identity verification and fraud detection tools are crucial to protect consumers and businesses from increasing fraudulent activities.

The Growing Threat of Fraud

Fraudsters are increasingly using sophisticated tactics to commit synthetic identity fraud and loan stacking. Synthetic identity fraud involves creating fictitious identities by combining real and fake information, while loan stacking occurs when fraudsters apply for multiple loans simultaneously using fake IDs. Owino warns that financial institutions and businesses must adapt quickly to stay ahead of fraudsters.

Introducing ID Authentication and High Velocity Check

TransUnion Kenya has introduced two new solutions as part of its flagship IDVision with iovation suite: ID Authentication and High Velocity Check. The ID Authentication service checks additional details against the Home Affairs database to prevent fraudsters from using false identities, while the High Velocity Check solution flags multiple uses of a single ID within a certain period, enabling lenders to identify potential loan stacking early.

Global Impact

According to TransUnion’s latest research, suspected fraudulent digital transactions rose 56% in Kenya and 5% globally between January and April. The company identified over 100 million suspected fraudulent transactions worldwide during this period.

Evolving Identity Verification

Experts warn that identity verification is no longer limited to traditional methods but requires understanding a person’s digital footprint, devices used, and behavior. TransUnion’s IDVision with iovation combines personal and digital data to provide an accurate picture of each individual while delivering friction-right experiences for consumers.

“Businesses need to know exactly who they are dealing with and how to protect their genuine customers from fraudulent activities,” said Owino. “The companies that come out on top will be those leveraging fraud prevention tools that provide great detection rates and friction-right experiences for consumers.”

The Future of Fraud Prevention

With Africa emerging as a global hot spot for online fraud, innovative solutions are required to address unique challenges in the region’s digital economies. IDVision with iovation provides businesses in Kenya with an upper hand on fraudsters while streamlining access for genuine customers.

“Early signs during the pandemic suggest we will see fraud continue to rise in the coming months,” warned Owino. As fraudulent activities continue to evolve and become more sophisticated, financial institutions and businesses must adapt quickly to stay ahead of the game.