Technology Adoption and Occupational Fraud Risk: Empirical Evidence from Commercial Banks in Kenya

Abstract

Fraud risk is a global problem and its frequency is highest in commercial banks than any other industry globally. Occupational fraud statistics indicate that a typical organization looses approximately 5% of its annual revenues to fraud. When applied to the consolidated Commercial banks revenue for the year 2011, the loss translates to approximately Kshs 12.82 Billion. The problem is that Kenya has the highest incidences of fraud is East Africa. The study set to find if technology adoption influence occupational fraud in Commercial Banks in Kenya. A representative sample of 30 banks out of the 43 Commercial banks licensed by Central Bank of Kenya by June 30, 2012 was used in this study. Bivariate linear regressions were used to test the null hypothesis; there is no relationship between technology adoption and occupational fraud risk in Commercial Banks in Kenya. The findings from this study are the positive correlation between technology adoption and moderate influence on occupational fraud risk in Commercial banks in Kenya. These results provide insights into the Occupational Fraud Risk Management and the regulatory authorities in the deterrence of fraud in Kenya and developing Countries.