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Uganda Electronic Banking Systems Could be Vulnerable to Cyber Criminals


Banks and telecom companies that offer financial services through sophisticated technology such as the use of Automated Teller Machines (ATMs) to access bank accounts, and money transfers through mobile phones, are increasingly becoming targets for cyber criminals who create loopholes in the system to allow them to steal huge sums of money from customers and businesses.

Whereas Rwandan banks and telecom companies report that the rate of cyber crimes in Rwanda is still very low, there are still no policies to draw upon if there is a financial loss arising from cyber criminality.

Banque Populaire du Rwanda (BPR), which is heavily investing in electronic banking, says that it has not experienced any cyber attacks on its network for almost four years. However, it says that it is increasing security on its network by deploying firewalls to protect its clients and systems from intruders.

But Alex Kioni, alliance manager at IBM, says that firewalls alone are not enough. It is not only the amount of attacks that is expected to increase, he says, but also the complexity and sophistication of attackers that bypass the firewall.

Banque Commerciale du Rwanda (BCR), another local bank that is increasingly adapting to electronic banking, says that in addition to the firewalls, it is testing vulnerability of its network. BCR Managing Director Sanjeev Anand says that the bank is trying to prevent cyber crime proactively.

However, the two banks are yet to develop procedures and policies with detailed guidelines that would determine compensation in case a customer incurs a financial loss rising from cyber attack.

And it seems that the issue of compensation is not well discussed within other local banks and telecom companies either.

Neither William Katete, the head of Corporate Communications and Public Relations at the National Bank nor Damien Ndizeye, Chairman of ADECOR, a consumer rights' organization, could confirm the existence of laws that ensure compensation of victims of cyber crime in case of a financial loss.

MTN Rwanda's Head of Mobile Money Albert Kinuma says that if a consumer experiences a cyber attack and incurs a financial loss, compensation depends on the situation in which the attack happened. This view is also shared with BCR's Anand. However, with no developed procedure on how to investigate and make an evaluation, customers may be left without compensation.

Last year's report by a global consulting firm Deloitte & Touche indicates that 60% of banks in East Africa are susceptible to security threats costing the region about $245 million every year. This is partly on account of low Information Technology (IT) budgets to put in place strong systems that would deter intrusion.

During a recent conference on cyber security held in Kigali, it was disclosed that in the East African Community (EAC)--Uganda, Kenya, Rwanda, Tanzania and Burundi--, the cost of cyber crimes grows by $3 million every month.

The conference brought together participants from the banking sector, ICT and government organs to discuss and share best practices in fighting cyber crime. But the issue of compensating victims--customers--was not tackled.

Kioni says that since businesses such as banks and telecoms are the fastest adopters of new electronic financial services such as mobile and internet banking, it is logical to assume that the security risks rises alongside these increased advancements.

Mind Mabhunu, who shared the experience of Standard Bank of South Africa with regard to strategies that would ensure maximum security of networks and clients, said that it is essential for the government and the private sector to partner in dealing with cyber security. He said it is better to have security than to need it when things have gone wrong.

BY JULIE VULPIUS:The Independent Newspaper

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Apr 18, 2012
Kenya, Rwanda, Uganda, Tanzania and Zambia lose $245 million in cyber fraud.
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Cyber crime is the most dangerous threat and still a big challenge in the region, according to George Kiseka, a representative of International Criminal Police Organisation (Interpol) regional office Nairobi, Kenya.

Interpol is the world's largest international police organisation, with 190 member countries, that facilitates international police cooperation in dealing with cross border crimes

Kiseka was speaking Monday at the opening of a three-day Interpol workshop on cyber crime which is underway at Rwanda National Police (RNP) premises.

Interpol is the world's largest international police organisation, with 190 member countries, that facilitates international police cooperation in dealing with cross border crimes.

"Much as we must embrace modern information technology systems to drive our financial operations, cyber related crimes in the areas of money transfers, ATM banking, internet frauds, among others, come along," he said.

"Cyber crime is still a big challenge in the region. We need everybody to be aware of this crime and people must be careful whenever they are transacting their businesses using modern technologies".

The workshop that brought together 18 Interpol officers from Kenya, Rwanda, South Sudan and Tanzania, will focus on providing a platform to police officers where they will share knowledge and skills from each other on how to handle electronic scene of crime investigations such as Internet crime, mobile banking crime, among others.

Kiseka stated that the workshop will empower the officers, who are investigators and prosecutors, to be able to handle the crimes that are rampant due to the introduction of modern technologies.

"This is a transnational crime that needs concerted efforts among Interpol officers," he noted.

According to a survey conducted by Deloitte last year, banks in Kenya, Rwanda, Uganda, Tanzania and Zambia lose $245 million in cyber fraud.

The Deputy Inspector General of Police, Stanley Nsabimana, urged the participants to fully understand the techniques and skills needed in tracking down cyber crime.

"This is an opportune moment of sharing best practices in cyber crime investigation and laying strategies to combat them," he noted

Speaking to The New Times, Ismael Baguma, the Director of Interpol at RNP, said the scale of cyber crime is still low but that it would not stop them from fighting the vice.

"Despite the fact that the rate of cyber crime in our country is still low, we cannot just sit down and think that we are safe, "he said.

"We are starting to register cyber crime cases. So we find this workshop very important to enable our police officers acquire the knowledge and skills to track these vices.

Police Spokesperson, Theos Badege, said about six cases of cyber related crimes were registered last year.

The forum that is being held on a rotational basis was first held in Uganda.


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