Nigeria’s banking fraud rises to N5.57bn

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Nigerian Electronic Fraud Forum (NeFF) has put the value of electronic banking fraud cases over the last three years at N5.571 billion.

This is just as the Central Bank of Nigeria (CBN) Director, Banking and Payment System, Mr. Dipo Fatokun said more efforts were being made to ensure safety of customers’ funds. Fatokun, who is also the chairman of the forum, said this at the unveiling of the 2017 NeFF Annual Report in Lagos on Thursday.

According to him, the steering committee of the forum would be instituting an industry customer protection plan targeted at reducing the volume of fraud in the system. Fatokun added: “It is sad to note that there has been a little increase in electronic fraud especially in recent times. It has therefore become necessary to review and strengthen the existing rules and enact new regulations to steer the problem.”

Data released by NeFF showed that while the value of fraud perpetrated across counter has been on the decline over the last three years, fraud through transactions done via ATMs and mobile banking have been on the increase.

Across the counter data, however, showed that the value of fraud committed stood at N732.85 million in 2015, and then dropped to N511.072 million and N259.022 million in 2016 and 2017. However, fraud via ATM channels rose from N355.89 million in 2015, to N464.514 million in 2016, and increased further to N497.643 million in 2017. Likewise, mobile payment fraud rose to N347.645 million in 2017, having dropped slightly from N248.144 million in 2015 to N235.17 million in 2016. Fatokun noted that the increasing level of fraud on mobile was mainly from USSD transactions.

He said: “Many of you present would agree on the need for a framework on for USSD as a channel for electronic payment transaction and that was why the CBN early this year issued a framework to that effect because we noticed that USSD channel was primarily responsible for the upspring in electronic fraud in recent times.

“That framework should have been implanted from the first day of this month but we shifted the implementation date to October 1st because certain requirement on that framework could not be put in place so it is better done completely.”

Speaking further, he said: “We remained committed as a forum in ensuring that the Nigerian payment system is not only easy to use but also reliable and trust worthy.”

“Speaking on this line, members of the forum would agree with me that the role of financial technology fondly called fintech cannot be ignored. Their innovations have facilitated the expansion of electronic payments and helped in providing financial services to the underserved or previously unreached groups.

It has the need for guidance and respective supervision. Yes there is the need for them to be guided and effectively supervised as it has become more imperative now more than before.”

On her part, the Executive Director, Operations of the Nigeria Interbank Settlement System (NIBSS), Mrs Crystabel Onyejekwe noted that the increasing level of fraud was not peculiar to the country. Meanwhile, the CBN in a circular posted on its website stated that bank directors will henceforth be responsible for the protection and security of customers’ data against e-fraudsters. In a circular released titled: “Risk-based Cyber-security Framework for Deposit Money Banks,” signed by K.O Balogun for CBN Director of Banking Supervision, the central bank said provision of oversight and leadership and resources to ensure that cyber-security governance becomes an integral part of corporate governance, rests with the Board of Directors.

“The Board of Directors through its committees will now have overall responsibility for the DMB/PSP’s cyber-security programme. It will provide leadership and direction for effective conduct of the processes.

"The Board will ensure that cyber-security governance is integrated into the organisational structure and relevant processes,” it said.

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