Kenyan stockbrokers Race to install New IT System
Stockbrokers are racing to install a common and more secure trading system in the next two months to curb cases of fraud by employees who exploit loopholes in the current operating platforms.
Donald Ouma, the Head of Marketing and product development at the Nairobi Stock Exchange said testing of the new back office system had started on January 3 and is expected to be completed by end of March.
Ouma said the system, which will have a direct connection between brokers' IT systems and the stock exchange's automated trading system, will reduce fraud by limiting manual processing of investor orders.
"The system has inbuilt alert features that send messages on attempted unauthorised actions for proactively managing any such risks. It has an audit trail functionality that tracks all changes made to data, and keeps a record of who changed it and when. Such changes are made available in a form that is easy to understand," said Ouma.
The system also sorts out dormant accounts and assigns extra security authorisation requirements before selling of any shares, a feature that is supposed to protect against sale of shares owned by either inactive or deceased investors.
Sterling Investment Bank chairman Stanley Ngaine, who is also a director at the NSE, said the information system estimated to have cost about Sh100 million will ease the detection and tracing of fraud.
"It is a versatile system and has more controls. There is no system that is foolproof but it should eliminate most operational issues and fraud," he said.