The Nigeria Inter-Bank Settlement System (NIBSS) announced a substantial loss of approximately N9.5 billion within the banking sector for the year 2023.
The disclosure was made by Premier Owoih, the Managing Director of NIBSS, during the third-quarter meeting of the Nigeria Electronic Fraud Forum (NeFF) held in Lagos.
The gathering focused on addressing the alarming surge of electronic fraud within the nation’s financial landscape, particularly concerning online gaming.
Temidayo Adekanye, NIBSS Chief Risk Officer, expressed serious apprehensions regarding this growing issue.
He highlighted the contributory role of the Central Bank of Nigeria’s (CBN) cashless strategy in the rise of electronic fraud within the banking sector.
Adekanye said, “The recent implementation of the cashless policies by the CBN has led to a significant upswing in transaction volumes in the industry, which, unfortunately, has been paralleled by a notable rise in fraudulent activities.”
He went on to state that “The increased operational efficiency has inadvertently paved the way for a surge in fraud cases across the sector. During the first quarter of 2023, reported fraud cases through the industry forum portal amounted to N5.1 billion.”
Adekanye’s presentation underscored the gravity of the situation as he provided a comparative analysis of electronic fraud data spanning multiple years, highlighting the rapid escalation of this issue.
He reflected on the trend, stating, “In the words of the Managing Director, comparing fraud trends over the past five years, there was a reported N3 billion loss in 2019, which starkly contrasts with the N9.5 billion loss recorded in 2023 to date. Evidently, fraud losses have experienced a dramatic surge over this five-year span.”
Adekanye continued, “Taking a closer look at the data from January to July 2023, there has been a noticeable spike between June and July, registering a 39 percent increase. Specifically, the recorded fraud loss for July 2023 amounted to N1.2 billion, indicating a 54 percent surge over this period. Overall, from January onwards, actual fraud losses for the year totaled about N2.7 billion.”
Adekanye identified key tools exploited by cybercriminals, singling out betting platforms, wallet accounts, and point-of-sale (POS) agents as the most effective conduits for their illicit activities. These avenues often operate in ways that are challenging to trace, as reported by BusinessInsider.
Given the national e-fraud recovery rate of a mere 5 percent, Adekanye stressed the urgent necessity of bolstering authentication and identification protocols for POS agents, cryptocurrency accounts, sports betting accounts, and other vulnerable entities.
Additionally, Musa Jimoh, NeFF Chair and Director of Payment System Management at the CBN, emphasized the imperative of combatting cybercriminals due to their disruptive potential within the entire financial system.
Jimoh advocated for heightened awareness and education, stating, “As the engagement of individuals with the financial system intensifies and transaction volumes surge, the potential for exploitation by criminals correspondingly increases.”
Jimoh’s remarks align with a global concern for maintaining the integrity of financial systems in the face of an evolving cyber threat landscape. With electronic fraud posing an escalating challenge, collaborative efforts between financial institutions, regulatory bodies, and the public become crucial in fortifying the security of digital transactions.
