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The retail sector in Kenya faced the highest number of online criminal attacks in the first half of 2024, according to a report by TransUnion.

Digital fraud, which involves the illegal theft of money or sensitive information through online channels, impacted several industries, with retail, gaming, and community platforms (such as dating sites and forums) being the most targeted. The report showed that retail accounted for 11.7 per cent of suspected digital fraud attempts, leading all sectors, followed closely by gaming at 11.4 per cent.

Retailers are a prime target for cybercriminals due to the vast amounts of sensitive customer data they store, including credit card details, identification, purchase histories, and contact information—data that can fetch a high price on the dark web.

According to Cytonn’s Kenya retail report, as of July this year, main local and international retail supermarket chains in Kenya opened more than 10 branches, bringing the total of retail supermarket branches to 244 branches. While gaming had previously seen the highest digital fraud rate in 2023 at 10.2 per cent, it saw an 18 per cent year-on-year decrease.

With its increasingly growing user base and significant financial stakes, the gaming industry is an attractive target for cybercriminals looking to exploit its scale, infrastructure, and vulnerabilities. The gaming industry presents a unique combination of factors that make it particularly vulnerable to cyberattacks.

Amritha Reddy, senior director of fraud solutions at TransUnion Africa, said that despite the good-faith efforts that are being made by global organisations to identify and prevent fraud to date, fraudsters continue to evolve.

“In that sense, businesses should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection as critical components of their fraud prevention programs,” she advised.

Community apps ranked third, accounting for 3.3 per cent of fraud attempts. Overall, suspected digital fraud comprised 4.6 per cent of all attempted digital transactions in Kenya, reflecting a rising trend in cyber schemes. Globally, Kenya had the 10th highest rate of digital fraud among 19 regions monitored by TransUnion.

In the second quarter of the year, 80 per cent of Kenyans said that they were targeted with online, email, phone call or text messaging fraud attempts in the last three months.

From the analysis, only 8 per cent of the targeted reported falling victim with the 72 per cent reporting that they successfully evaded the scam.

Morris Maina, CEO of TransUnion Kenya stated that now and, in the future, organisations face more sophisticated cybercriminals weaponizing identity data at scale to perpetuate first- and third-party fraud schemes.

“Fraud prevention is a necessary investment that needs to be as efficient as possible, using better data and risk signals, advanced analytics, and integrated technology, without increasing lost business and additional expense from false positives,” he advised.

According to reports by TransUnion customers from H2 2023 to H1 2024, synthetic identity fraud (the use of personally identifiable information or PII to fabricate a person or entity in order to commit a dishonest act for personal or financial gain) was the fastest growing Digital Fraud type volume-wise globally, increasing 153 per cent.