Factors Determining Vulnerability of Automated Teller Machines to Insecurity Against Commercial Banks in Nairobi County Kenya
Abstract
This paper uses data collected for an MA Thesis on assessing the factors determining vulnerability of ATMs to insecurity among commercial banks in Nairobi County, Kenya. The study was conducted in three commercial banks located in the Nairobi City County. Specifically, the study established the various types of ATM crimes among commercial banks, examined the impact of bank internal control mechanisms, established the effect of ATM location on vulnerability of ATMs to insecurity, and evaluated the influence of ATM user competence on vulnerability of ATMs to insecurity. The study was guided by Fraud triangle theory and crime prevention through environmental design theory. Descriptive research design was adopted. The study targeted 2391 employees in the commercial banks in the study area. The study utilized proportionate stratified to select a sample of 96 respondents while purposive sampling techniques in selecting key informants for interviews. Questionnaire and key informant interviews were the methods of data collection. Descriptive statistics and content analysis were the methods of data analysis. Main types of ATM crimes established among commercial banks in Nairobi County include; theft by fraudulent electronic transactions (31%), theft by electronic data interception (24%), vandalism of ATMs (18%), and robbery of couriers who fill ATMs with cash (5%). According to this study, commercial banks have formulated and adopted information security policy, implemented audit policy which allows for regular auditing in identifying possible irregularities related to ATM crimes, and inadequate employee trainings on fraud detection, response and reporting that was observed to have an effect on curbing the ATM related insecurity. Thirdly, although the commercial banaks have done much to curb ATM related crime, there are gaps that need to be addressed. According to the last objective, commercial banks have not adequately educated their customers on risks associated with using ATM use and related frauds that led to vulnerability of the users. Amongst other recommendations the study recommended target hardening of ATMs clients by investing in innovations that enhance security of electronic transactions and related crimes. Further the study recommends beefed up user education, increased regular ATM audits, embrace the ergonomic designs of ATMs to assist in recessing the monitor display more deeply within the terminal to provide adequate security against shoulder surfing.
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