How Banks Are Grappling To Safeguard Customers’ Funds Against E- fraud
OVERsix years ago, a cashless policy became totally operational in Nigeria. The aim was to encourage electronic transactions and reduce the amount of physical cash in the economy. The logic was that this would minimise the risk of cash- related crimes in society.
But the major downside of the policy has been pervasive electronic banking fraud ( efraud). Although the cashless banking system was designed to foster transparency, curb corruption and drive financial inclusion, it’s threatened by the growing perpetration of fraud. About N15.5 billion was lost to bank fraud in 2018. And about 60 per cent of the fraud was perpetrated online owing to available internetbased and tech- rated banking services. Thus, the banking sector has been grappling with efforts to tackle this menace headlong lately.
Speaking on the development about a year ago, the Director, Payment System Management at the Central Bank of Nigeria ( CBN), Sam Okojere, said the apex bank was coming out with clear guidelines for the operation of financial technology ( Fintech) companies and Payment Service Banks ( PSBS) in order to prevent fraud and make the financial system safer for all.
Okojere, who spoke at the Access Bank Anti- Fraud Week forum, held in Lagos, said: “A new BVN guideline should be coming out any moment from now. When the exposure draft is released, I will encourage you to make a suggestion regarding the area of concern.”
He hinted of a meeting where key stakeholders in the financial ecosystem would come together to brainstorm on ways to improve the payment system in Nigeria.
“The risk- based supervision framework that would actually take care of Fintechs and PSBS is in the offing; very soon there will be a very clear guideline on that,” Okojere added.
The Group Managing Director/ Chief Executive Officer, Access Bank Plc, Herbert Wigwe, while welcoming participants, said the workshop was the bank’s avenue of reaching out to members of the community on issues around fraud, risk and cybersecurity through close engagement.
Quoting from a report by Nigeria Inter- Bank Settlement System ( NIBSS), Wigwe said in 2018, about 89 per cent of all financial services fraud in Nigeria happened through digital channels while only 11 per cent were non- electronic. He further quoted Pwc’s Global Economic Crime and Fraud Survey 2020, stating that the total cost of cybercrimes was worth an eyewatering $ 42 billion.
In Nigeria, he said customers were culturally not attuned to security issues around digital transactions, adding that even well educated people run the risk of falling victim to social engineering and identity theft traps.
“We must go beyond educating customers on the protection of crucial information to actual data protection and integrity amongst operators and stakeholders. I am a great believer in collaboration to solve problems. Our collaborative efforts in data protection and customer education are required in countering security threats in digital payments,” he said further.
In April this year, the CBN also issued a fraud alert about the activities of cyber- criminals who are taking advantage of the current coronavirus pandemic to defraud citizens.
CBN’S Director of Corporate Communications, Isaac Okoroafor, said that cybercriminals were taking advantage of COVID- 19 pandemic to defraud citizens, steal sensitive information or gain unauthorised access to computers or mobile devices using different techniques.
The apex bank admitted that the trend was not peculiar to Nigeria, as there has been a rise in COVID- 19 related cybercriminal activities all over the world. He, however, noted that it was the priority of the apex bank to ensure that Nigerian bank customers were made aware of the current trend to prevent them from falling victims.
Against this backdrop, a leading retail bank in the country, Access Bank Plc., has been proactive in ensuring that its customers are safe from fraudulent activities, as it has continued to task customers to be on the lookout for fraudsters who use new scam methods to rip people off by preying on the distress that comes with the pandemic.
The bank revealed that fraudsters contact their potential victims either via mail, phone call or text messages to request for sensitive banking details with the promise of crediting their account, after which they proceed to withdraw the money in the victim’s bank account.
It added that they often come under the guise of government officials, social advocates and false NGOS allocated to share the relief fund that was promised by the government. The bank warned that this was an easy scam to fall for.
The Executive Director, Retail Banking, Access Bank Plc., Victor Etuokwu, said: “Access Bank is imploring its customers to be wary of any message demanding their personal or bank details. Customers must remember that the bank will never ask for their BVN, full card PAN, PIN, mobile app activation code, OTP or password as most of this information is readily available to the bank via its database.”