Assessment of internal electronic fraud in Uganda: a case of Stanbic bank Uganda

Abstract

This study aimed at examining electronic fraud among commercial banks in reference to Stanbic Bank Uganda. The study was premised on three objectives: to examine the factor influencing electronic fraud in Stanbic Bank Uganda, to identify challenges faced in the process of combating electronic fraud at Stanbic Bank Uganda Limited and to establish strategies that can be used to combat internal electronic fraud at Stanbic Bank Uganda. The study employed a cross-sectional and descriptive research with a quantitative study approach which involved collecting numerical data from 86 respondents out of a sample of 113 Stanbic bank staff, using a survey questionnaire. Data were analyzed using the statistical package for social science (SSPS Version 23). The study revealed that Stanbic Bank Uganda faces significant electronic fraud due to a lack of forensic accounting investigators, weak fraud detection tools, lost cards and stolen personal information, inadequate customer authentication processes, and lack of collaboration among banks. Challenges include constant regulatory landscape, insufficient operational risk data, and insufficient stakeholder involvement in risk management. Inadequate operational risk policies and procedures, failure to discuss risk-related lessons learned, and lack of a risk/electronic fraud management plan are also identified. Strategies to improve electronic fraud management include assessing operational risks, combining cybersecurity and operational risk modeling, developing key risk indicators, evaluating risk profiles, and training employees. Therefore, the study recommended that commercial banks should create key risk indicators (KRIs) to alert management to potential issues and proactively measure risks. It recommends using cybersecurity and operational risk modeling to identify and mitigate risks, improving operational risk management. Training employees to anticipate potential problems can help identify and mitigate risks before they become problems. Evaluating risk profiles helps banks identify key risk drivers and prioritize mitigation measures. Allocating resources to committees can improve electronic fraud management efficiency, reduce operational losses, enhance reputation, and meet regulatory requirements.