The rising incidence of electronic fraud in Nigeria is giving regulators, bank CEOs sleepless night and is expected to continue if unchecked as Nigeria Inter-Bank Settlement System (NIBSS) revealed that banks in the country have lost N9.7 billion to e-fraud in first seven months of 2023.
The Managing Director, NIBSS, Premier Oiwoh, disclosed this during the Nigerian Electronic Fraud Forum (NeFF) third quarter (Q3) general meeting and the launch of its website in Lagos. Oiwoh who was represented by the Chief Risk Officer at NIBSS, Temidayo Adekanye, stated that that the highest fraud counts in the last six months of 2023 was recorded in May with 11,716 records while the lowest count was recorded in June with 6,240.
He expressed concern that the fraud trend in the last 5 years has increased each year since 2019 from N3 billion to N14.3 billion in 2022, representing a 377 per cent increase. According to him, the cashless policy from the Central Bank of Nigeria partly contributed to the increase in e-fraud.
“We had the cashless policy from CBN and that policy incurred a dramatic increase in the volume of transactions in the industry which variably had an impact in the volume of fraud in the industry itself. For instance, the total fraud reported through the industry forum portal for the first quarter (Q1) of 2023 stood at N5.1 billion. When compared to the figure of N1 billion, N1.6 billion, N0.8 billion and N1.2 billion recorded in April, May, June and July, it rose to N9.7 billion in seven months according to monthly actual loss value.
The mobile channel recorded the highest total reported fraud count between January and July 2023 and it was discovered that betting platforms, wallet accounts, or POS agents are the most effective mediums fraudsters are using and those platforms are almost untraceable”, he explained.
Also speaking at the event, the Director, Payment Systems Management, CBN and Chairman, NeFF, Musa Jimoh, stated that the creation of an identity management system (IMS) and collaboration with industry stakeholders will help reduce cybercrime activities across all channels to the barest minimum.
Speaking on the theme; New Strategies for Combating e-fraud in a Cashless Environment, Jimoh stated that the theme was a topic of utmost relevance and significance in the evolving digital landscape. He noted that as Nigeria strives to promote a safe and secure digital payment ecosystem, there is a need to adapt innovative strategies and stay several steps ahead of fraudsters who seek to exploit vulnerabilities in the system.
According to him, a creation of an identity management system and collaboration will help taper the rising incidence of cyber fraud which is significant with betting and Point of sales (PoS) platforms.
He said, “Fraud happens anywhere, almost all the channels, not just betting platforms and this is why collaboration is important. We are working with everyone in the financial system, especially the regulatory and security agencies to see ways in which due diligence can be done on financial transactions done electronically.
The Bank Verification Number (BVN) is surely one way we can point to and say is a tool to combating financial fraud.
The betting companies should ensure that they create a form of identity management system to see who is betting and this is what we think. We think that the creation of an identity management system enshrined in betting platforms can help wade away e-fraud”.
For her part, the Managing Director, Fidelity Bank Plc, Nneka Onyeali-Ikpe, noted that if the level of fraud is not urgently addressed, more than N20 billion will be lost to fraud by the end of the year.
Onyeali-Ikpe noted that the gradual escalation of e-fraud is beginning to erode customers’ trust in the financial system and emphasised the need for a swift and decisive approach to address E-fraud within the financial sector.
She said: “As technology continues to advance at an unprecedented pace, our reliance on digital transactions have grown exponentially.
However, with the rise of these digital interactions, the threat of e-fraud has become a significant challenge affecting individuals, businesses, and the industry”.
Source: Sun
