Uganda Banks Loss $3.9 Billion To Hackers And Bank Fraud In 12 Months

Within a span of 12 months, Ugandan banks have lost the sum of $3.9 billion to over 200 cases of hi-tech, international, and economic crimes, with scams such as issuance of fake visas, bank fraud, and online business fraud topping the list, an Interpol report read.

According to Business Insider, $542,500 (Shs 1.9 billion) was lost to the issuance of fake visas which accounted for the second-highest rate of fraud, while online business fraud caused a loss of $112,441 (Shs 393 million). Internet fraud and email hacking caused losses of Shs 300 million and Shs 124 million, respectively.

Also Read: 10 Simple Steps to Avoid Getting hacked Online In 2021

Telecom giants, MTN and Airtel control over 90% of the mobile money market in the country and are said to be the most affected in the hack. As at the time of the hack, mobile money service providers were forced to suspend bank to mobile money or wallet transactions.

Both telecom companies hold escrow accounts with Stanbic Bank Uganda which facilitates the majority of the mobile money transactions.

In a joint statement, signed by MTN, Airtel, and Stanbic Bank, the three companies acknowledged the hack, saying that hackers had accessed systems of a third-party service provider called Pegasus Technologies, and as a result, affecting all bank to mobile and wallet transactions.

Just in case you are wondering, Pegasus handles mobile money transactions between MTN and Airtel Uganda. Also, Stanbic Bank's mobile banking platform, FlexiPay is also powered by Pegasus.

Cyberattacks in all forms aren't news in Uganda, most especially recently in the banking sector. However, bank fraud prevention and detection still remain an issue.

According to a Ugandan police IT expert, banks in Uganda are being hacked almost every month but choose to remain silent over fears of scaring away their clients. 

There are just a few numbers of banks that are "bold enough to come out and seek our intervention in tracing for hackers based here and outside countries. But a majority of the cases are never reported," the police IT expert said. "They know if they keep reporting, people will feel insecure when their money is kept in a bank that is often hacked."

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