Nigerian Banks vulnerable to Fraud- EFCC

The Economic and Financial Crimes Commission (EFCC) has raised the alarm  that all the banks are highly exposed to electronic attacks, saying that they lack the necessary legal protection to deter and prosecute offenders.

A member of the Bank Fraud Section of EFCC, Ibrahim Shazali, disclosed this Tuesday at the ongoing workshop organised by the Nigeria Deposit Insurance Corporation (NDIC) for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Ilorin, Kwara State.
“Nigeria, as a developing country, is particularly exposed as we are an emerging economy experiencing rapid economic growth,  while simultaneously dealing with underdeveloped Information Technology (IT) and legal infrastructure,” he said.
Speaking on the topic, “Investigating Electronic Transactions in Nigerian Banks: A Forensic Auditors Perspectives,” Shazali stated that as at 2014, it was reported that Point of sale (PoS), automated teller machine (ATM) and mobile banking were the major avenues by which cyber criminals operated.
Citing statistics from the Inter-Bank Settlement  System (NIBSS), the EFFC official said there was an increase in e-Channels from N485million of actual loss from fraudulent attempts in 2013 to N6.2billion in 2014, representing 1, 178per cent increase.
According to him, in terms of perpetrators of fraud, Nigerian banks, like their global counterparts, experience more external than internal fraud.
“Despite this alarming, rapidly growing figures, the lack of a well-defined legal context for prosecuting cyber crimes and financial fraud related to electronic platforms resulted in a pitiful apprehension success rate in 2014,” he lamented.
On curbing e-fraud, he recommended  compulsory adoption of know–your-customer (KYC) and the bank verification number (BVN) registration for every banking customer.
Also, speaking on: “E-banking and Financial Inclusion,” Head, Financial Inclusion Secretariat of CBN, Mrs. Temitope Akin-Fadeyi disclosed that the benefits of electronic payments in the country are expected to be about $900million by 2020, through reduced leakage of funds, better access to financial services and lower transaction costs.
She further noted that financial inclusion enables undeserved people and communities to have access to financial services that would enhance their economic opportunities, boost productivity in various sectors and, contribute to economic development.
Akin-Fadeyi, however, hinted how e-banking could support financial inclusion, explaining that for the e-banking technologies to be successful, financial institutions must consider critical factors such as, “understanding customers needs, organisational flexibility, availability of resources, systems security, having multiple integrated channels, e-channel specific marketing, systems integration, support from top management, and good customer services.”