KCB Group Loses $7.7 Million After Technical Glitches Allowed Customers to Withdraw More Than Their Balances

The issue arose during critical data migration from on-premise to a colocation centre hosted by iColo, a tier 3 data centre.

Customers of Kenya’s largest bank, KCB Group, were able to withdraw more than their actual balances due to technical glitches, leading to a loss of about $7.7 million (KES 1 billion) between October 11 and 31.

The issue arose during critical data migration from on-premise to a colocation centre hosted by iColo, a tier 3 data centre. A subsequent attempt to integrate cloud databases resulted in a synchronisation error. This led to real-time balance updates failing, which then allowed customers, mainly those with KCB-M-PESA target savings accounts, to withdraw up to triple their saved amount.

The bank has since restricted the accounts of overdrawn customers and told them to regularise their accounts so they can recoup the funds.

An investigation by TechCabal has revealed multiple service disruptions and system outages over the last few weeks, a pointer that the lender is struggling to patch its systems as it modernises its IT infrastructure.

Lapses in technical operations have become a concerning issue in the Kenyan banking sector over the last few years. Ecobank Kenya lost “millions of dollars” between 2020 and 2022 due to vulnerabilities in its card operations team, which left the bank exposed to potential fraud by merchants and staff. Similarly, Equity Bank was targeted in a debit card fraud case where $2.1 million was stolen.