Nairobi Star (Nairobi)
James Mbugua
14 December 2011
The banking industry has been urged to collaborate to fight cyber crime through which banks are losing billions of shillings per year.
Susan Potgeiter, general manager of SABRIC South Africa, an industry anti-fraud body told a bank security conference in Nairobi yesterday that fraud is not a competitive but a collaborative effort.
The conference, dubbed East Africa ATMS, Cards, and Mobile Banking security summit, heard how fraudsters are devising new ways to milk their vaults.
Conference organizer, Sammy Kioko of Cybersec Africa quoted industry figures that showed banks lost a whopping Sh3billion by December last year compared to about Sh1billion the year before. “The amount that the banks lost to fraud amounted to an average of Sh246million a month with about Sh1.2billion lost during the year without being recovered,” Kioko said.
Yesterday’s session focused on ATM fraud particularly the practice of card skimming where criminals swipe a card holder’s data using different technologies. “The ATM has become a way of getting the money from the system and into the street,” Potgeiter said.
Potgeiter’s organization, SABRIC, receives from banks all the incidences of fraud and disseminates the information to member banks in South Africa. It was formed by the banks themselves. “Fraud is not competitive in South Africa,” she said. “The banks cooperate. We host an inter bank group every week.” Data shared includes the top 20 ATMs targeted during each week.
According to Kioko, ATMs owned by the commercial banks in Kenya now number well over 2,1800 and withdrawals topped Sh115million for card issuers. “With the huge potential for growth in East Africa, we ain’t seen nothing yet,” Kioko said. Obadare Peter, of Digital Encode Nigeria, advised countries to consider moving from magnetic strip cards to a combination of Chip and PIN.
He said criminals who had operated ATM skimming in Nigeria before the chip and PIN method was introduced were now exporting their expertise outside. He demonstrated how using a solenoid and a software called Exeba, fraudsters can copy card data in one swipe. He singled out as particularly vulnerable points of sale terminals where fraudsters keep a second POS machine.
On swiping, the client is told that their card has been rejected and they have to swipe again on the genuine POS. By then, their data and PIN have been copied. Potgeiter said crooks liked to hit ATMs on Fridays when they could return to withdraw on Saturday and Sunday before their crime was discovered on Monday.
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