Banks Caution on Technology Frauds
Central bank of Kenya(CBK) governor Dr Patrick Njoroge has cautioned commercial banks and other financial institutions against engaging in crypto currencies and Foreign exchange( FX )online trading scams.
Njoroge warned that some of the crypto currencies and FX online transactions may be a pyramid scheme that will leave the financial institutions smarting from losses thus affecting their financial stability.
The central bank governor who was speaking on Tuesday when he opened a three days workshop on the growing influence of alternative investments being held at the Kenya school of monetary studies [KSMS], advised the financial institutions to vet the new products before being engaged.
The CBK governor said there were 26,000 block chain products offered worldwide in year 2015 and was found that 92 percent of them were illicit products.
“Do not be excited by new products, there are too many of them which are scam, and have came in the wake of new technology which has threats of cybercrime, fraud, and money laundering,” he added.
He however said the Central Bank of Kenya was working closely with central banks of other countries to tame the risk of new products and other crimes threatening the financial institutions.
The governor also said that Central Bank of Kenya in partnership with stakeholders in finance were revising rules and regulations on banking and other financial institutions, aimed at preventing financial crimes including frauds, online frauds, and money laundering, among others from unscrupulous people.
On technology, Njoroge urged the financial institutions to adapt to changing technology cautioning them not to be exited with the technology but mind to understand the use of it and adopt technology which is safe and useful to them.
He observed that despite the fact the CBK should monitor commercial bank payments, it has no ability to monitor all money payments and transaction timely.
Njoroge said that it’s a duty of banks to protect its customers and maintain confidentiality on personal and financial issues.
Scores of bankers are attending the workshop organised by institute of certified investment and financial analyst [ICIFA]
By Denson Mututo.