News

Kenyan innovators work to stem the tide of ATM fraud

February 15, 2012

Unemployment and a sluggish economy in Kenya have led to an increase in bank-related crimes, said an article in Business Daily Africa. In some regions — including Kenya, South Africa and the UK — bank crimes rose 40 percent in 2011, a PricewaterCoopers’s Global Economic Crime Survey found.

ATMs account significantly to per-bank losses in Kenya of about Sh3Billion ($36,288) each year according to a report released by Deloitte Kenya last year. In many cases, those losses are caused when young people take a salaried working class member hostage and force him to provide ATM cash access with a card and PIN. Against this background, information technology innovators at Usalama Innovative Systems Ltd are working to stem the tide of fraud with new software that works with existing core banking software.

Usalama software reduces the exposure of ATM users by limiting the proportion of funds accessible to fraudsters. The software provides the user with a second PIN number apart from the “normal” PIN. The second pin is the one the victim supplies when compelled by thieves. The second pin permits a withdrawal only of a certain percentage of funds in the account.

“The second PIN number is what the account holder reveals to ATM fraudsters and therefore limits what can be withdrawn and in the process saving his money and his life,” says Dennis Karma, an IT professional and half owner of Usalama. 

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