Suspected digital fraud attempts coming from Kenya dips 61% as fraudsters shift focus on betting, and travel and leisure companies
The rate of digital fraud originating from Kenya decreased in the first quarter of 2022, with suspected online fraud attempts declining by 60.9% from the same quarter last year, in line with the global decrease of 22.6% during the same time period.
TransUnion’s quarterly report notes that while the overall rate of suspected digital fraud declined in Kenya, there were significant shifts year-over-year (YoY) within certain industries.
Sectors such as financial services, telecommunications and communities (particularly online dating) all saw YoY decreases as far as attempted digital fraud from Kenya is concerned. Conversely, fraudsters in Kenya increased their suspected scams in sectors such as gambling, and travel and leisure.
“What we observed in Kenya and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities,” said Amritha Reddy, head of fraud at TransUnion, a South African based company.
The firm said that the financial services industry saw the largest YoY decrease in the suspected fraud attempt rate for digital transactions coming from Kenya, at 71.5%. Fraudsters have also cycled through certain industries during the pandemic and are now rotating to other vulnerable sectors.
The gambling industry exhibited the greatest YoY growth in the rate of suspected digital fraud coming in Kenya in Q1 2022, at 48.7%, with the most prevalent type of fraud in that sector globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.
The travel and leisure industry experienced the second highest YoY increase from Kenya, at 25.1%, where fraudsters look to take advantage as the sector opens up and Kenyans start travelling again.
“What’s critical is that companies don’t become complacent with fraud prevention measures as fraudsters become ever more sophisticated. At the same time, companies should leverage this temporary shift in fraudulent activity to focus on optimising customer experience without compromising security,” said Reddy.
Year-over-year growth rates of suspected digital fraud attempts (Q1 2021 to Q1 2022)
Reddy said TransUnion derived to its conclusions on fraud against businesses on intelligence from “billions of transactions and more than 40,000 websites and apps” contained in its identity proofing, risk-based authentication and fraud analytics solution suite.
“As digital fraud rates stabilise in Kenya during a period when fraudsters are searching for new vulnerabilities, it’s important that organizations shift their focus to identifying more of the ‘good’ customers and transactions to drive revenue and customer lifetime value. By reducing false positives, false declines and manual review rates, organizations can improve their customer experience through trusted connections while still keeping the fraudsters at bay,” said Reddy.