KAMPALA, July 23, 2026 — A new research report has revealed that the rapid growth of Fintech-based fraud poses an increasing threat to the cooperative sector across East Africa, particularly in Uganda and Kenya, as financial institutions become more reliant on digital financial services.
The Online Fraud Report 2026, released by cybersecurity and identity verification firm Sumsub, indicates that cooperatives and Savings and Credit Cooperative Organisations [SACCOs] in Uganda and Kenya are becoming increasingly vulnerable due to the expanding use of financial technology [Fintech] platforms across the region.
According to the report, fraud rates in East Africa are now 66 percent higher than the global average, with Artificial Intelligence [AI]-powered scams rapidly replacing traditional document forgery.
The report released in Nairobi via zoom [virtual launch] warns that although Uganda and Kenya have made progress in strengthening fraud prevention measures, cybercriminals are increasingly exploiting AI technologies to carry out more sophisticated financial crimes.
“Eastern Africa has overtaken every other region in the world as the leading hotspot for iGaming fraud, Fintech conspiracies and AI-powered financial fraud,” said Jarryd Jensen, Regional Director for Southern Africa at Sumsub.
The report highlights the growing cybersecurity and identity verification challenges facing one of the world’s fastest-growing digital financial markets.
Researchers analysed more than three million fraud attempts and millions of identity verification checks conducted between 2024 and the first quarter of 2026. The study found that fraud attacks targeted several large cooperatives, medium-sized SACCOs and other financial institutions across the region.
According to the findings, Africa’s financial fraud rate reached 2.54 per cent during the first quarter of 2026, significantly higher than levels recorded in Europe, Latin America, North America and the Asia-Pacific region.
The report further notes that after declining during 2025, fraudulent activity rebounded sharply this year, making Eastern Africa the largest contributor to the global increase in online financial fraud.
While acknowledging the anti-fraud initiatives introduced by Uganda and Kenya, the report says these measures gained positive traction during the final quarter of 2025, although fraud levels remain relatively high.
It also notes that fraud risks vary considerably across African markets, requiring financial institutions and digital service providers to develop country-specific fraud prevention strategies rather than adopting continent-wide approaches.
Within Eastern and Central Africa, Malawi emerged as the region’s highest-risk market, recording a fraud rate of 4.7 percent, ranking fourth across the continent.
“Africa’s rapid digital adoption and expanding access to online financial services have created enormous opportunities for operators, but they have also attracted increasingly sophisticated fraud actors,” Jensen said during an online discussion on the report.
Globally, the report found that fraud rates increased by nearly 18 percent year-on-year, while suspicious financial transactions surged more than fourfold.
The average value of suspicious transactions also rose to more than US$6,500, reflecting the increasing sophistication and financial scale of organised fraud networks.
One of the report’s most significant findings is the changing nature of identity fraud across Africa. It warns financial institutions against over-reliance on traditional customer data, noting that criminals are increasingly exploiting personal information obtained through data breaches, phishing attacks and other illicit means to bypass digital verification systems.
According to the report, 97 percent of fraud detected across the continent is intercepted during facial biometric verification, suggesting that fraudsters are increasingly using genuine stolen identities rather than counterfeit documents.
The report also notes that cybercriminals are deploying AI-generated faces, manipulated identity documents, synthetic identities and automated application processes to overwhelm digital verification systems.
It urges the cooperative sector, particularly in Uganda, Kenya and Rwanda, to strengthen its fight against financial fraud by investing in advanced fraud detection and identity verification technologies to safeguard members’ savings and enhance confidence in digital financial services.
Among the African countries identified as having the highest fraud risks, Côte d’Ivoire recorded the continent’s highest fraud rate at 7.8 percent, followed by Burkina Faso, Cameroon, the Democratic Republic of the Congo and South Africa.
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