Moderating effect of staff training on determinants of fraudulent practices committed by bank employees in Kenyan commercial banks
Date
2025
Authors
Robi, J. M.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
In the modern financial landscape, fraudulent practices in commercial banks pose a critical challenge to financial stability, regulatory compliance, and customer trust. This study examines the determinants of fraudulent practices among employees in Kenyan commercial banks, focusing on internal control systems, regulatory compliance, organizational culture, and technological advancements. The aim of this study was to evaluate the effectiveness of various factors in preventing fraudulent activities and maintaining the integrity of banking operations. The research is based on the Fraud Triangle Theory, Fraud Diamond Theory, Social Learning Theory and Routine Activity Theory, which offer valuable insights into the motivations and opportunities for fraud within financial institutions. A positivist approach is taken, employing an explanatory research design. Primary data was gathered through structured questionnaires directed at bank managers involved in risk management, compliance, internal auditing, and governance across Kenya’s 38 licensed commercial banks. A total of 152 participants were selected using a census sampling method and the data was analyzed through both descriptive and inferential statistical techniques to uncover patterns and relationships among the variables. The study findings reveal that Kenyan commercial banks have effective internal control systems, comply with regulatory requirements, foster a strong ethical culture and utilize advanced technologies to prevent fraud. The study further reveals that there was a strong positive correlation between internal control, regulatory compliance, organizational culture, technological advancements, staff training and fraud detection. The study concludes that robust internal control systems, regulatory compliance, a strong ethical culture, and the use of advanced technologies are key factors in reducing fraudulent practices in Kenyan commercial banks. It is recommended that Kenyan commercial banks enhance their whistleblowing mechanisms, invest in regular employee training on fraud prevention, and further strengthen their internal control systems. Additionally, banks should continue to adopt innovative technologies and foster a culture of ethics and transparency to minimize fraud risks.
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Citation
Robi, J. M. (2025). Moderating effect of staff training on determinants of fraudulent practices committed by bank employees in Kenyan commercial banks [Strathmore University]. http://hdl.handle.net/11071/15757