Kcb Customers Overdrew Accounts By 7.7 Million Following System Glitches During Migration

Technical glitches during a critical data migration allowed customers at Kenyas largest bank, the KCB Group, to withdraw sums above their bank balances. Customers withdrew around 7.7 million KES 1 billion from October 11 to 31, ten people familiar with the matter told TechCabal.

The bank has restricted the accounts of customers who overdrew their accounts and has notified them, people familiar with the matter said. The bank is also prepared to use loan recovery companies. After migrating its databases from on-premise to a colocation centre, the bank attempted to integrate its cloud databases, leading to a syncronisation error.

After moving servers, the balances were not updating in real-time at the backend. Thats why customers could overdraw the accounts, one person familiar with the matter said.

KCB-M-Pesa target savings accounts, which allow people to access short-term loans and save, were the worst hit. People could withdraw up to three times the saved amount, said one person with direct knowledge of the account.

The technical glitches, which lasted over three weeks, paint a picture of the banks struggles to modernise its IT infrastructure.