Ecobank Kenya lost millions of dollars between 2020 and 2022 after weaknesses in its card operations team exposed the lender to potential fraud by merchants and staff, an internal report seen by TechCabal showed.
The report, by a task force appointed in 2023, exposed critical lapses in Ecobank Kenyas card operations, making it easy for employees and merchants to manipulate transactions and commit fraud. Those lapses went undetected for two years, raising questions about the banks oversight and technology.
While the report did not disclose the full financial hit, it revealed that $43.4 million (KES5.6 billion) was erroneously posted in the banks system, and $162,346 was rejected by payment service providers like Mastercard. It also failed to recover $232,464 in chargebacks .
There was disregard for procedures in the merchants operation of acquiring product GLs (general ledger). Many manual entries posted therein were unprocedural and some erroneous, the report said.
There were no properly documented operating procedures and accounting entries for different card products. This led to the lumping up of different entries for different card products into the merchant acquiring GL.
