EFCC Chair Blames Rising Bank Fraud on Weak KYC Protocols

The Economic and Financial Crimes Commission (EFCC) Chairman, Ola Olukoyede, has attributed incessant fraudulent activities in Nigerian financial banks to negligence and robust Know Your Customer (KYC) protocols.

Olukoyede further highlighted the three most rampant fraudulent activities, including unbanked, under-served, and middle-class populations that put the customer’s data at risk and jeopardise the Fintechs reputation.

This observation was disclosed in a statement released by the EFCC during a meeting involving stakeholders in Abuja.

According to Olukoyede, many fintech firms fail to adhere to strict KYC guidelines, particularly when onboarding customers for tier-one accounts. He highlighted that this negligence creates vulnerabilities that fraudsters exploit.

“Olukoyede observed that there was a high level of poor internal control by fintechs at the level of the unbanked, the under-served, and the middle-class population spectrum,” the statement read.

” There’s quite a whole lot of fraud that goes around that particular level, so the issue of KYC (Know Your Customer) is very important, especially because of the issue of how fintechs open tier-one accounts, sometimes without attention to KYC. And people take advantage of this and are quick to commit fraud through this negligence,” Olukoyede stated.

Speaking about the possible solutions to curb cyber threats, Olukoyede noted that fintech firms should improve their onboarding process and be able to address the loopholes and weaknesses that fraudsters exploit. He also highlighted collaborations with the Financial Crime Commission.

“Increasing your level of collaboration with the EFCC would mean seeing yourselves as stakeholders in the fight against corruption. We would like you to respond to us when we make inquiries and requests,” he stated

“On our part, we are open to whatever it is that you want us to do. We value it that you are here today to seek a stronger tie and collaboration,” he added.

“When we have stakeholders come in and want to be part of what we are doing, majorly stakeholders like you, it gives us joy because we know that no one man can fight corruption alone. The collaboration you seek tells us that you want to strengthen your system; you want to be able to create more internal controls, “ he reiterated.

“You want to be able to put in place things that will mitigate those weaknesses that will lead to fraud within your system, that’s what we do. Our core mandate is the enforcement and investigation of economic and financial crimes. So, we’re glad and wish to collaborate with you,” he stated.