Factors influencing electronic fraud in the banking industry in Kenya:a case of Kenya commercial bank central region.
Fraud is one of the most serious corporate problems, and challenges in today's business environment. In the banking industry, many frauds are perpetrated through falsified payment instruments including computer fraud, Card fraud and Mail order fraud that’s commonly referred to as internet fraud.Frauds in Kenyan banks only prove that financial liberalization aggravates the inherent tendency of shallow markets to foster excessive speculation and worsens the systematic consequence of such speculative activity. Revelations of electronic fraud, evidence of insider trading and consequent collapse of investor interest have led to an almost unstoppable downturn in Kenyan banks. Bank frauds concern all citizens. It has become a big business today for fraudsters.KCB Kenya is divided into 5 regions of operation namely; Western region, Coast Region, Central Region, Nairobi Region, and Great Rift Region. The study specifically sought to determine the factors influencing electronic fraud in the banking industry in Kenya in reference to Kenya Commercial Bank (Central Region). This study employed descriptive survey design. The population of interest in this study comprised of all staff of Kenya Commercial Bank central region.KCB Kenya Central region had 37 branches and a total of 630staff members as at time of the study. From the above population of 630, a representative sample of 241 staff members was drawn. The study employed stratified random sampling technique in selecting the staff members based on their department and their management level. Primary data was collected using questionnaires.On the other hand secondary data was collected from newspapers, published books, journals and magazines as well as other sources. The data was then analyzed using descriptive statistics. The researcher further employed multi-linear regression model to study the causes of electronic fraud in the banking industry in Kenya.The findings were presented using tables and graphs for further analysis and to facilitate comparison.The study found that level of awareness of the customer had the greatest effect on the electronic fraud in the banking industry, followed by security controls, then quality management while level of salaries and remuneration had the least effect to the electronic fraud in the banking industry.The study recommends that the top management in the banks should ensure that they fully support fraud detection policies by allocating enough resources to them in order to gain a competitive edge.The banks should encourage teamwork, improve the working environments and set clear roles and responsibilities. There is need to improve on the efficiency of communication between the branches and interdepartmental communication at Kenya Commercial Bank as network failure is a major contributor to fraud. This will enhance the vigilance at all the quotas and enhance better understanding of policies and fastens decision making. The administration at the banks should enhance the employee morale and satisfaction through bonuses and allowances. Customers should review their agreement with the bank and know what rights they may be waiving by not using certain security measures.