The central bank of Uganda has tasked commercial banks and financial institutions to work towards guarding themselves against the growing threat of financial fraud, warning that this brings about a loss of trust in the financial sector.

The Deputy Governor of the Bank of Uganda (BOU), Michael Atingi-Ego, warned that fraud threatens the continuity of financial institutions, could lead to the loss of their capital, and undermines the integration of the financial system.

Atingi-Ego was speaking at the ongoing 2nd Financial Fraud Forum 2024, organized by the Uganda Bankers Association, at the Mestil Hotel in Nsambya on Wednesday, July 24, 2024.

He noted that fraud is mostly perpetuated by some employees of financial institutions, who, he said, collude with fraudsters. He asked banks to eject such individuals.

“We quickly need to deal with information asymmetry in all our processes and decision-making as financial service providers. Sharing to support real-time detection, swift deterrents, and consequence management is pivotal to fighting fraud,” Atingi-Ego said.

Nonetheless, Julius Kakeeto, the Chairman of the Uganda Bankers Association, echoed Atingi-Ego’s concerns, emphasizing the need for financial institutions to strengthen technological, regulatory, and legal frameworks to deter perpetrators of fraud.

“We have to empower customers and end-users to promote integrity among banking and financial sector staff, enhance systems and processes among financial institutions, promote collaboration among key domestic anti-fraud stakeholders, and subscribe to and collaborate with international anti-fraud agencies,” Kakeeto stressed.

The call highlights the need for robust measures and transparency in the financial sector to restore public confidence, ensure stability, and promote growth in Uganda amid increasing fraud challenges.