The relationship between ICT utilization and fraud losses in commercial banks in Kenya
The purpose of this study was to establish the relationship between ICT utilization and fraud losses in commercial banks in Kenya. Secondary data was collected from reports at central bank, Banking Fraud Investigation Unit and audited financial reports of the 43 commercial banks in Kenya. Data was analyzed using SPSS through correlation analysis and regression analysis. The findings were presented in tables and graphs. The major findings of the study indicated that total values transacted through EFT, RTGS and ATM had a positive correlation with the total fraud costs of commercial banks. The level of staff wages also had a positive correlation with fraud losses. The main conclusions were that ICT utilization has exposed commercial banks in Kenya to more fraud. This is due to the speed of execution of transactions. Adoption of ICT tends to increase the chances of Identity theft due to the fact that transactions are online and real time. The levels of staff wages are also a motivation for fraud from the employee side. The researcher recommends more robust fraud mitigation practices and policies to ensure that all elements of fraud are captured in the adoption of ICT. Banks should consider increasing their staff costs to mitigate frauds. Bank employees have access to all information relating to customer accounts hence should be well rewarded and motivated in order to prevent them from falling into traps of fraud. The researcher suggests that a similar study be carried out targeting MFIs to get their perspective of the effect of ICT utilization on fraud losses.