At 9.15 am on a Monday morning, a Nairobi-based distribution company receives an email that appears to come from one of its regular suppliers. The message explains that the supplier has changed its bank account and asks the company to update its payment details before settling an outstanding invoice.
The email looks familiar. The supplier’s name is correct, the invoice matches the company’s records, and the payment deadline is approaching. The finance officer updates the details and authorizes the transfer.
By lunchtime, the money is gone.
A call to the supplier reveals the truth: no bank details were changed. Fraudsters had impersonated the supplier, and the payment has gone to an account controlled by criminals.
The company now faces an urgent challenge. It must alert its bank, investigate the transaction, establish how the fraud occurred and determine how to meet its outstanding obligations to the genuine supplier. A routine payment has become a financial and operational crisis.
The incident illustrates how a cyber incident can affect an organization without hackers necessarily bringing down its computer systems.
Cybersecurity: common apps hackers are using to exploit Kenyan institutions
Beyond the firewall
Businesses often associate cybersecurity with sophisticated attacks on servers and networks. Yet fraudsters can exploit ordinary business processes, including email and sms communication, payment approvals and access to sensitive information.
The threat is also evolving as artificial intelligence enables more sophisticated fraud, deepfake impersonation and automated cyberattacks.
According to PwC’s recently published Cyber Digest, titled AI-Driven Defence in the Age of AI-Driven Threats, these developments are changing the cybersecurity landscape and increasing the need for businesses to strengthen their defences and prepare for the financial consequences of cyber incidents.
For a small or medium-sized enterprise, an unexpected financial loss can strain cash flow. For a larger organization, a similar incident can expose weaknesses in internal controls, supplier verification and risk management.
Preventing such incidents starts with practical measures. Businesses should independently verify changes to supplier payment details using previously confirmed contact information, require appropriate approval for transactions and restrict access to financial systems. Employees should also know how to report suspicious communications immediately.
But prevention is only one part of the equation. Businesses must also consider how they would manage the financial consequences of a cyber incident. Banks like Equity have publicized ways in which they contact their customers, but it’s always good to verify with your relationship manager.
Preparing for the unexpected
This is where Equity Insurance’s Cyber Liability cover comes in. Designed to protect against specified financial losses arising from covered cyber incidents, the solution can provide businesses with an additional layer of financial protection alongside their cybersecurity controls.
Depending on the policy terms, the cover includes risks associated with data breaches and ransomware, as well as agreed regulatory fines and business interruption losses where legally permitted.
Businesses need to understand the specific risks covered, policy conditions, limits and exclusions before selecting protection.
Equity Insurance offers Cyber Liability as part of its insurance solutions for corporates and SMEs, recognizing that organizations need to consider both the prevention of cyber incidents and their potential financial consequences.
The first step is to assess the systems, information and business processes on which your organization depends. The next is to establish whether your existing safeguards and insurance arrangements adequately address your exposure.
A fraudulent email can take seconds to send. Recovering from its consequences may take much longer. Is your business prepared?
