“Unburdened with the experience of the past, each generation of bankers believes it knows best, and each new generation produces some who have to learn the hard way.” – Irvine Sprague
The Kenyan Commercial Bank robbery
NAIROBI (Reuters) – In a heist reminiscent of a Hollywood movie, Kenyan robbers spent months tunneling into the bowels of a bank located opposite a police station and stole the equivalent of half a million dollars, police said on Tuesday.
Police said they had arrested two men and one woman over the robbery, but had not recovered the 50 million Kenyan shillings, reported missing by staff at the branch of Kenya Commercial Bank (KCB) on Monday when they showed up to work.
“We have not recovered the stolen money,” said Simba Willy, sub-county police commander in the town of Thika, northeast of Nairobi, where the heist took place.
“We suspect the robbers hired one of the shops near the bank (while digging their tunnel),” Willy told Reuters.
The robbers were able to remove the earth during their months-long excavation without arousing suspicion by concealing it in boxes, the Daily Nation newspaper quoted local traders as saying.
The traders described the two young men who had rented the store as “very hardworking” and “introverts”.
This news last year about the break-in of the Kenyan Commercial Bank through a tunnel dug into the vault reminds me of a film I watched many years ago, when a group of bank robbers used exactly the same technique.
Physical Security in Branches
It seems like physical security in branches is treated lightly. During my banking career, I had the opportunity of do a countrywide operational risk awareness programme in branches. This countrywide experience left me with vivid memories of how vulnerable we can be in branch banking. It explained the necessity of making sure that policies and procedures on risk need to be as down to earth and practical as possible.
What is the point in sitting in boardrooms carving out beautifully-worded handbooks for staff when they have no idea of the various concepts and fundamental reasons that went into the policy decisions? These guidelines need to be regularly hammered on and escalated down for all staff to appreciate and use. By the way, how is your branch’s physical risk management dashboard?
What is risk anyway? “Risk is the potential of gaining or losing something of value. Values can be gained or lost when taking risk resulting from a given action or inaction, foreseen or unforeseen. Risk can also be defined as the intentional interaction with uncertainty” ….Wikipedia
Do you know that branches are the ‘nerve-centres’ of banks, and therefore the key outlets where most transactions take place – and obviously at more risk? Banks’ traditional functions have been collecting funds for lending. The main risks in these functions are credit risk and operational risk. Credit risk is the failure of borrowers to pay their loans. Following closely is operational risk.
What is Operational risk?
The Basel Committee defines operational risk as the “risk of loss resulting from inadequate or failed internal processes, people and systems or from external events”. This definition includes human error, fraud and malice, failures of information systems, problems related to personnel management, commercial disputes, accidents, fires, floods… In other words, its scope seems so wide you do not immediately perceive the practical application.
Enough of definitions…let us look at how these fit in with the bank branch’s activities.
Visits to Branches
An awareness programme should not just be made up of itemising a list of ‘dos’ and ‘don’ts’. People easily get fed-up listening to instructions….it is the same…same …same. Why don’t you try the following interesting methods: On the day of your proposed visit, ensure that you reach the destination very early…at latest by 6.30am when most staff may not have arrived. What are the likely revelations?
- The security guard is not ready for work…still dressed in mufti clothes or not even available….perhaps the night shift security man has left….leaving the branch very vulnerable.
- The front door is left ajar, especially in branches where there is only one entrance (no back door, only one exit in case of fire or alarms) – seriously? Where is our Bank of Ghana? Did it allow branches to be opened without visiting the structures? You can enter the branch without your ID. If they don’t even know you, just tell the security guard and cleaner that you are from Head office to conduct training.
After admiring your car, some of them will let you in with a flourish…carrying your laptop bag after you and giving you the full African respect! I could be carrying a bomb or a gun! In one branch, it was the cleaner who stopped me in my tracks and called the branch manager on the phone to confirm my visit. Yes, that cleaner was recommended for some appreciation, for his show of security-consciousness.
- The cleaner will be observing you with some apprehension as you go round the branch, opening the unlocked cabinets, opening unlocked drawers which contain some incriminating documents…you know what. Sure, the cleaners wake up early to ensure the premises are clean before staff arrive. Nobody wants to be met with dirty surroundings. But dear Branch Manager/Operations Manager, do you know that “while you are busy sleeping, your legs are outside” (direct translation from an Akan proverb). Ok. you take your much-needed beauty sleep, but these are some of the dangerous states or red-flags you might have left the branch in:
- Cluttered desks, confidential documents in the printer, identity cards in the Remittance Teller’s enclosures which some excited customers forgot after receiving their remittances from abroad..(sika ye mogya) loose and opened files showing customers’ correspondence with the bank, with their exposed signatures and personal information!!
- Unshredded documents, like computer print-outs of customers’ transactions revealing so much information which fraudsters would have paid thousands of cedis to get. The duty of confidentiality has become a joke.
- Customers’ copies of cheque or cash deposit slips in the drawers of tellers and customer service staff.
- Blank letterheads, statement sheets and even real customers’ statements waiting to be collected……as for this one, it is gold for visa racketeers!!
- Unlocked cabinets with customers’ loan files and mandate files……Oh what a treasure for recalcitrant loan defaulters! Do you want to take them to court for willful default? Wait until you start preparations for court, you will never find the original loan file! It is an age-old problem. Really, there is nothing new under the sun.
- Official stamps lying about. When it is copied and used for fraud, you may suspect the poor, innocent cleaner.
- CCTV not working? Have you notified the authorities? How is it positioned? Where do you keep the back-ups? Are the recordings being over-ridden as you replay? Is your complaint logged?
- Electronic gadgets still on after close of work, and overnight…especially the printers, air-conditioners, photocopiers, kettles still plugged in, etc.? Why not? Many staff may not have had any training on fire prevention and may be ignorant of such end of day procedures.
Collecting all such exhibits and exposing risky issues during any fraud and risk prevention training makes much more sense to the staff, as they begin to appreciate the extent to which their activities can lead to losses for the bank. Ignorance is indeed a disease.
Gone are the days when branch managers preferred to keep large sums of cash in the vault, in anticipation of huge cash withdrawal requests from their customers. The need to make maximum use of cash has necessitated Treasurers of banks keep a close eye on vault cash holdings at branches – to ensure regular evacuation to the central bank and to enable overnight placements for maximum gains. The insurable cash limits of branches need to be adhered to, while customers should be counselled to patronise other cash-lite products and reduce their reliance on cash. I hope the cash stolen in the Kenya Commercial Bank was within the branch’s insured limits.
I will pause here. Next week, I will continue to give more practical insights into physical security at the branches. Meanwhile, be on your guard for no surprises.
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies for training young bankers in operational risk management, sales, customer service, banking operations and fraud.