Misturat AlausaInsider fraud is one of the major challenges faced by financial institutions, as employees may misuse their access to systems, customer information or financial processes for personal benefit or to assist external fraudsters.
Unlike external attacks, insider fraud is usually difficult to identify because employees often have legitimate access to the systems they exploit. It may involve unauthorized transactions, falsified records, customer data misuse, or collusion with external criminals. Without effective access controls and continuous monitoring, these suspicious activities can go unnoticed for long periods.
What Happened at Safaricom?
In the financial year ended March 2026, Safaricom dismissed 118 employees for fraud-related offences , an increase from 113 dismissals in the previous year. The company also referred 14 cases to law enforcement, twice the seven cases reported in the previous year.
The reported cases included theft, falsification of records, unauthorized access to customer call records, and security breaches. These cases show how employees can exploit their positions and access to compromise internal operations and customer information.
Safaricom also reported recovering KSh953 million linked to inflated agent commissions through proactive monitoring and data analytics. However, this recovery was not directly attributed to the 118 employee dismissals.
The incident highlights the need for financial institutions to implement controls that go beyond external threat detection. Businesses must also monitor internal activities, restrict access to sensitive systems, and identify unusual behaviour before it leads to financial or reputational damage.
5 Ways Businesses Can Detect and Prevent Insider Fraud
Preventing insider fraud requires a proactive approach that combines employee accountability, technology, access management and continuous risk monitoring.
Here are five measures businesses can implement.
1. Implement Strict Identity and Access Management
It is important for businesses to ensure that employees only have access to systems and information required for their roles. Access permissions should be regularly reviewed, while inactive accounts and unnecessary privileges should be removed. Applying effective identity and access management controls can help reduce opportunities for employees to exploit sensitive information or internal systems.
2. Monitor Employee Activities and Unusual Transactions
Continuous monitoring helps businesses identify behaviour that deviates from normal operational patterns. This may include unusual access to customer records, suspicious transaction approvals, unexpected changes to financial records and irregular payment activities. Adopting automated monitoring systems can help flag these activities for further investigation.
3. Strengthen Identity Verification and Authentication
Businesses should verify employee identities before granting access to sensitive systems or approving high-risk activities. Multi-factor authentication, role-based access controls and additional verification requirements can make it more difficult for unauthorized individuals to access employee accounts or misuse legitimate credentials.
4. Use Fraud Intelligence to Identify Suspicious Patterns
Fraud intelligence helps businesses identify connections between suspicious activities, individuals and digital identifiers. By examining information such as phone numbers, email addresses, IP addresses and device details, organizations can identify data points associated with known fraud signals and investigate potentially fraudulent activities. This approach can also help uncover patterns that manual reviews might miss.
5. Establish Internal Reporting and Investigation Procedures
Businesses should provide employees with secure and confidential ways to report suspected misconduct without fear of retaliation. It is also necessary to establish procedures for investigating reported incidents, documenting findings and escalating confirmed cases to the appropriate compliance teams or law enforcement agencies where necessary. Regular ethics training and internal audits can further reinforce accountability and remind employees of their responsibilities when handling customer information and company resources.
Talk to our team to learn how Prembly’s identity verification, fraud intelligence, and monitoring solutions can help protect your business from insider fraud.