Ugandan banks are under pressure to upgrade their safety systems to international standards or risk being locked out by their counterparts in the West. The move seeks to deny terrorists a platform that could be used to finance terrorist activities as evidence continues to link financial fraud to terrorism.
Last year alone Uganda banks and insurers lost more than Shs12 billion in fraud related cases and money laundering.
“This drive is mainly for the fear of supporting terrorism, although I think the cause is good,” Mr Robert Nyamu, Deloitte’s director forensic and litigation support told Daily Monitor.
He said: “Local financial institutions should get on board because it is no longer possible for a bank to operate in isolation.”
Adapting automated systems
Responding to the matter, the Centenary Bank general manager in charge of audit, Michael Nyago said: “It is necessary for us to move from manual systems to automation or else we shall continue to have these challenges of fraud related crimes.
According to Mr Steven Kwesiga, the head of risk and compliance, Bank Of Africa, upgrading systems that can detect fraud is not only limited to the bank but should also involve insurance companies.
Mr Kwesiga’s said: “Insurance companies are also susceptible to fraud with the most common being false motor insurance claims and manipulation of motor vehicle costs.”
Opportunistic Retail Fraud has also been named as another costly form of insurance claims fraud. This is where individuals exaggerate or inflate genuine claims.
By Ismail Musa Ladu, Daily Monitor