Afrigather Ecobank Kenya misplaced hundreds of thousands of {dollars} between 2020 and 2022 after weaknesses in its card operations group uncovered the lender to potential fraud by retailers and workers, an inside report seen by TechCabal confirmed.
The report, by a process drive appointed in 2023, uncovered vital lapses in Ecobank Kenya’s card operations, making it straightforward for workers and retailers to govern transactions and commit fraud. These lapses went undetected for 2 years, elevating questions concerning the financial institution’s oversight and expertise.
Whereas the report didn’t disclose the total monetary hit, it revealed that $43.4 million (KES5.6 billion) was erroneously posted within the financial institution’s system, and $162,346 was rejected by cost service suppliers like Mastercard. It additionally didn’t get better $232,464 in chargebacks.
“There was disregard for procedures within the service provider’s operation of buying product GLs (common ledger). Many handbook entries posted therein had been unprocedural and a few inaccurate,” the report stated.
“There have been no correctly documented working procedures and accounting entries for various card merchandise. This led to the lumping up of various entries for various card merchandise into the service provider buying GL.”
Management gaps and insufficient coaching for the groups processing transactions worsened errors that left the financial institution’s card operations susceptible.
Ecobank Kenya didn’t instantly reply to a request for feedback.
The investigation recognized a $2.1 million steadiness with out supporting documentation within the financial institution’s GL, elevating considerations over the character of the funds and whether or not they had been associated to fraud.
“A residual steadiness of $2.1 million was left excellent in GL155000068 unsubstantiated. This steadiness was a discount from the preliminary quantity which was roughly $15 million as of July 2022,” the report stated.
The maker-checker course of, an inside management course of that forestalls unauthorised transactions, was weak. The financial institution’s chargeback monitoring course of was additionally insufficient, permitting discrepancies and potential losses.
The financial institution’s card operations group didn’t add transaction supply paperwork on a number of events. Between July and December 2021, the every day service provider common ledger had a debit of as much as $34.8 million (KES4.5 billion) that didn’t have corresponding credit.
Eleven entries amounting to $16.2 million (KES2.1 billion) had been duplicated.
“On account of this omission, it was not possible to find out the quantity payable to retailers, the quantity receivable from schemes and the service fee receivable from the retailers on today,” the duty drive discovered, including that omissions and delays weren’t detected or flagged.
Different transaction information had been uploaded months after the funds had been moved, complicating the reconciliation course of. As an illustration, transactions from March to Could 2022 with a worth of $11.6 million (KES1.5 billion) had been uploaded on June 30 and July 1-4 2022.
African tech leaders and world gamers shall be at Moonshot by TechCabal. You will get tickets right here.
