Kenyan banks lost a record Sh1.9 billion to fraud in 2025 as criminals exploited weaknesses in digital payment systems, online banking and card transactions. The Central Bank of Kenya (CBK), in its Financial Sector Stability Report released in November 2026, recorded a 19.4 per cent increase in actual losses compared with Sh1.59 billion reported in 2024.
The number of reported fraud cases also increased to 385 from 353 in the previous year, while the amount exposed to fraud rose to Sh2.03 billion from Sh1.96 billion. Of the total amount targeted, banks recovered only Sh127.43 million, leaving approximately 93.75 per cent of the exposed funds lost.
Card fraud recorded the sharpest increase in financial losses, with stolen funds more than doubling to Sh645.2 million from Sh263.3 million in 2024. Despite the increase in losses, reported card fraud cases declined to 16 from 24, indicating that individual incidents involved significantly higher amounts.
Mobile banking fraud remained another major threat, although losses declined to Sh634.3 million from Sh810.7 million. Reported cases also fell to 136 from 146 over the same period.
Meanwhile, online banking fraud cases increased to 132 from 106, with financial losses rising to Sh157.5 million from Sh111.8 million. Internet scams recorded one of the fastest increases, with cases climbing to 22 from nine, while stolen funds surged to Sh86.5 million from Sh6.1 million.
Computer fraud losses also increased to Sh212.5 million from Sh203.4 million, while identity theft cases rose to 63 from 56. However, losses associated with identity theft declined to Sh168.2 million from Sh199.1 million.
The CBK attributed the growing threat to increasingly sophisticated cyberattacks involving SIM swaps, malware, phishing schemes and identity cloning. The regulator warned that the rapid adoption of digital financial services, artificial intelligence and third-party technology providers has expanded the potential vulnerabilities within the banking system.
The regulator further noted that recovery rates had deteriorated significantly. Banks recovered 18.8 per cent of stolen funds in 2024, compared with just 6.25 per cent in 2025, increasing the financial burden on lenders and affected customers.
The rising losses come as Kenya's financial sector continues shifting towards digital transactions. Mobile money providers had 44.4 million active customers in December 2025, compared with 36.9 million a year earlier, increasing the scale of electronic financial transactions.
The CBK says it is strengthening cybersecurity supervision and working with payment service providers to improve monitoring and reporting. Banks will face growing pressure to reinforce transaction security, protect customer information and improve fraud detection as digital financial services expand.
