Insider abuse major source of fraud in banks - CBN

The Central Bank of Nigeria (CBN) has identified increased insider abuse in banks as a major cause of fraud in the banking industry.

A circular released yesterday, signed by Director, Banking and Payments System Department, Dipo Fatokun, said this abuse revolves around identity theft and abuse of authorization.

“The increased use of automation in most banking payment processes has further escalated insider abuse in banks with weak authentication procedures.”

The circular said it has therefore become necessary for the Central Bank to issue the following directives to all Deposit Money Banks (DMBs), Implement a Maker/Checker control structure for all payment platforms, including account and Database system maintenances on core banking systems.

Other directives include that “the risk appetite/capacity of individual banks will be a key factor in considering transaction limits for maker/ checker roles. DMBs are expected to comply by December 31, 2015; Implement Two Factor Authentication at login points for applications driving Transfers, Withdrawal, Deposit, Standing Order, Account Maintenance and System Maintenance processes; An implementation plan should be submitted to the Central Bank by January 30, 2015 and all banks are expected to fully comply by December 31, 2015, failing which defaulting banks would incur a penalty of N50,000.00 daily.

CBN further said all payment processing Gateways and Third Party Processors should implement Fraud - Monitoring Tool to check transfers from an account to multiple bank accounts by December 31, 2015.