Saccos are increasingly becoming a target for cyber-attacks as digital technology uptake continues to rise in the sub-sector.
A survey conducted by the World Council of Credit Unions’ (WOCCU) through a USAID Cooperative Development Program (CDP) – Technology and Innovation for Financial Inclusion (TIFI) project, and in partnership with the Kenya Union of Savings and Credit Cooperatives (KUSCCO) and IRNet Coop Kenya (ICK) has shown electronic frauds are targeting Saccos due to their weak cybersecurity in their systems.
The study conducted between April and May 2020 among 18 Saccos found out that five out of the total sample had suffered a cyber-attack in the past. Four of the Saccos had no system for transaction monitoring.
“The institutions were reluctant to divulge details about the nature and level of losses incurred during the attacks. There were 8 cases where SACCOs did not have a digital transformation strategy, 5 cases where there was no cybersecurity policy, and 9 cases where there was no cybersecurity budget,” reads the study report.
Researchers noted that the “absence of critical policy documents leads to the ineffectual implementation of digital technologies.”
Most Saccos acquire ICT hardware and software without proper guidelines on the specifications they need and lack the right personnel to manage them.
Cyberattacks’ changing nature also complicates things for many Saccos as many of their members do not have the right information on electronic frauds.
“SACCOs are not innovative! The benchmarking culture has changed to the copy-paste culture,” said a Sacco IT manager.
The upward trajectory in the use of digital services inevitably carries with it cyber risks. According to the Africa Cybersecurity Report by Serianu Ltd, cybercrime was estimated to cost the Kenyan economy USD 210 million in 2017. A 2018 survey by the same firm reported that 97% of SACCOs in Kenya spend less than USD 10,000 a year on cybersecurity.
A worrying trend of cyber-attacks in Saccos
