Card Fraud Detection Techniques on Performance of Commercial Banks in Nairobi, Kenya
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Date
2016-12
Authors
Gakuru, Allan Maina
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Fraud is one of the major ethical issues in the card industry. The study sought to find out
card fraud detection techniques on performance of commercial banks in Kenya. The main
aim of the study was to identify the different types of card fraud, and, review alternative
techniques that can be used in detection of card fraud. The study defines common terms in
card fraud, highlights key statistics and figures. The study reflects on how returns in the
banking sectors have been eroded due to card fraud; this has made management and
Shareholders of Banks to complain to the central bank which in turn has led to commercial
banks analyzing card fraud. The study is likely to have beneficial attributes in terms of cost
savings and time efficiency to all the relevant stake holders. The application of the techniques
reviewed in the study will minimize card fraud being one of the major factors affecting
performance of financial banks. The objectives of the study includes: the effects of Strong
Authentication detection technique, understanding the effects of advanced authorization
detection techniques, analyzing the effect of Card Fraud Management Systems detection and
finally understanding the effects of (PCIDSS) Payment Card Industry Data Security
Standard Compliance detection techniques on bank performance. The study adopted the
descriptive research design because it enabled the researcher to summarize and organize
data in an effective and meaningful way. It provides tools for describing collections of
statistical observations and reducing information to an understandable form. The target
population focused on the 42 banks who are members of the Kenya debit and credit card
association. The study used the census study on the targeted population. The researcher used
questionnaires in collecting primary data. The quantitative and qualitative analysis was
analyzed using both descriptive and inferential statistical analysis. Reliability of the
questionnaire was ensured by chronbach alpha which was reliable and consistent in
analyzing the responses of the questionnaires. Content validity was measured by using
experts in the field of study to validate the instrument. To establish the strength of the
association among the variables Pearson correlation coefficient and multiple regressions was
utilized. The integrity and effectiveness of the model was assessed by considering the
coefficient of determination and analysis of variance. The descriptive and quantitative
measure was calculated using the Statistical Package for Social Sciences (SPSS) 17.The
result of the study indicated a significant relationship between strong authentications
detection technique on performance of banks with the study indicating any change in strong
authentication technique affected the bank performance by 35.9%. The study also indicated
that Advance authentication technique significantly affects bank performance any change on
the technique affects bank performance by 45.8% positively. The study also concluded that
Card Management system technique had no relationship with bank performance with the
study indicating 0.999 as a figure which insignificantly affects the bank performance .The
study also indicated that PCIDSS compliance system significantly affects Bank performance
with a change of the PCIDSS compliance system affecting bank performance by 20%. In
conclusion most detection techniques affect bank performance.
Description
A Research Submitted in Partial Fulfillement of the Requirement for the Award of Master of Business Administration (Mba: Finance Option) in Kenyatta University