Data from the Nigeria Inter-Bank Settlement System (NIBSS) has revealed that the highest number of fraudulent transactions in the banking sector takes place on Automated Teller Machines (ATMs). According to the NIBSS data, internet banking was responsible for 34 per cent of electronic banking frauds.
The NIBSS data also showed that three per cent of electronic banking fraud took place on point of sales (PoS) terminal while e-commerce was responsible for one per cent of electronic banking fraud and others 19 per cent. In the same vein, a report by the Nigeria Electronic Fraud Forum (NeFF) of the Central Bank of Nigeria (CBN) has revealed that electronic banking fraud is on the increase.
The (NeFF) maiden report began with 2014 and captured views from over 10 Deposit Money Banks (DMBs) on e-payment channels. One common development, the report revealed, was similar trends in phishing attacks on banks.
Considering the surge in e-commerce and its potential to drive increased investment in Nigeria’s economy, analysts hailed the recent release of an e-fraud report by the Nigeria Electronic Fraud Forum as a welcome development.
“Electronic banking has increasingly become a core tool of banking business strategy and a strong catalyst for economic development. At the same time, the adoption of e-payment channels increases the incidence of electronic fraud, “said analysts at FBN Capital.
NeFF in the report stated that due to spikes in phishing, particularly in the last quarter of each year since 2012, most banks have invested in anti-phishing solutions to protect customers. According to the report, most organisations leverage on fraud prevention as a competitive advantage.
Banks, it stated, are naturally unwilling to share their fraud management strategies with competitors. Analysts believe the challenge of fraud on e-payment channels will make the federal government sceptical of banks collecting revenue for the government.,
“Banks should be able to play significant roles in revenue generation for the FGN by collaborating with ministries, departments and agencies (MDAs) on deploying electronic-based revenue collection platforms. This could complement the Treasury Single Account (TSA) initiative.
“However, with the challenge of fraud on e-payment channels, there would be no surprise if the Federal Government of Nigeria (FGN) was apprehensive. Given Nigeria’s high mobile penetration and low banking population, electronic financial solutions can also play a pivotal role in the FGN’s social welfare intervention programmes, “said FBN Capital.