The Nigeria Electronic Fraud Forum reported on Friday that Nigerian banking industry lost about N9.5 billion to electronic frauds in 2023, indicating that the digital infrastructure in the financial system are still subject to manipulation by cyber criminals.
Worried by the negative implications of the surging rat of e-fraud for the economy, the Forum has called for new measures and increased collaboration of all stakeholders, particularly the banks and the Ministry of Communications, Innovation and Digital Economy, to combat the rising trend.
The Forum, made this disclosure at its 3rd Quarter 2023 meeting in Lagos chaired by the CBN’s Director, Payment Systems, Musa Jimoh, had its theme as “New Strategies for Combating e-Fraud in a Cashless Environment”.
Delivering his paper at the meeting, the Managing Director of Nigeria Inter-Bank Settlement System (NIBSS), Premier Oiwoh, reflected on the disturbing trend of e-frauds in the country, especially through betting platforms.
The NIBSS boss, who was represented by the Chief Risk Officer at the meeting, Temidayo Adekanye, said: “Recently, we had the cashless policies from CBN, which was incurring a dramatic increase in the volume of transactions in the industry which variably as the impact of the volume of fraud in the industry itself. Now, the increased efficiency has also meant that fraud has dramatically increased across industry.
“For Q1 2023, the total fraud reported through the industry forum portal was at N5.1 billion. For fraud trends over the last five years, in 2019, we’re looking at about N3 billion and currently 2023, we are looking at about N9.5 billion to date. Fraud losses have increased dramatically over the last five years.
“So, as you can see also from the current perspective, from January to July 2023, there has been a slight jump between June and July, a 39 per cent increase with 8,649 with the actual fraud losses in July 2023, we’re looking at N1.2 billion which is a 54 per cent increase over the period. Now as you can see from January in general, we recorded about N2.7 billion in actual fraud losses.”
“What we see most is the fact that the primary channels are the betting platforms. So once the money hits the betting platform or a wallet account or in some cases POS agents once it’s cashed out, it is a black hole. There is no way you can recover that money. We’re talking about potentially five per cent recovery rates across the industry. So we all have to identify those betting and wallets accounts, POS agents, cryptocurrency accounts, and in some cases purchases”, Oiwoh added.
In his remarks at the meeting, the NeFF Chairman and CBN’s Director, Payment Systems, Musa Jimoh, said: “Today, we are here to continue that conversation to look at new strategies by which we can combat E-fraud. If we don’t combat the cyber criminals, they will weigh us down and disrupt the entire system. So, we all need to work together to see how we can make life extremely difficult for cybercriminals.
“We need to look at new ways, new techniques, and more efficient manners by which we can improve and guard against the banking and payment infrastructure and educate ourselves on how we can safeguard our bank credentials or tokens and all the information that the banks have provided to us to safeguard.
“The more information we have about what they’re doing, the more we are protected. The objective is to have zero fraud but you know, this is a gradual process because as you’re building techniques, they’re also exploiting other areas. As more people come into the financial sector as more transactions happen, people are vulnerable and so enlightenment education, we would continue to push it which is why it’s going to be a very long journey”, Jimoh added.
