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Nigeria’s Banking Fraud Losses Hit N12.3Bn In Four Years

Nigeria’s banking industry lost N12.30 billion to various frauds, involving 41,461 cases, between 2014 and 2017.

The Managing Director of Nigerian Inter-Bank Settlement System (NIBSS), Mr Adebisi  Shonubi, made this disclosure at the third Annual Banking Security Summit, with the theme: “Digital Channels & Open Banking Security,” organised by MAXUT Consulting, in partnership with OneSpan, in Lagos,

Specifically, the banking expert said that in 2014 a total of  1,461 frauds were recorded compared with the 10,743 incidents in 2015 while 19,531 and 25,043 frauds were recorded in years 2016 and 2017 respectively.

On “industry fraud overview with focus on mobile and payments related frauds during the four-year period, the NIBSS boss disclosed that the industry lost N6.22 billion in 2014, on attempted fraud value of N7.76 billion while N2.26 billion was lost in attempted fraud value of N4.37 billion in 2015.

Similarly, he explained that the sum of N2.19 billion in 2016 on attempted fraud value of N4.37 billion was recorded in 2016, adding that more fraud cases were reported in 2017, with an increase of 28 per cent compared with 2016,  but with less financial loss.

Shonubi, who was represented by the Head of Industry Security Services, Mr. Olufemi Fadairo, said that when analysed on gender basis, the fraudsters comprised of 73 percent males and 27 females.

A further analysis of the frauds on the channels used to commit the frauds showed that Automated Teller Machine (ATM) accounted for the highest fraud rate in 2017, with an actual loss of N497.64 million, with a fraud volume of 9,823. This was followed by mobile channels with N347.65 million loss on 5,055 fraud volume, while across-the-counter transactions accounted for N259. 02 million loss in 314 fraud volume.

The trend indicated that while frauds were generally on the decline, mobile frauds trend continued to rise.

Shonubi projected that mobile frauds would overtake ATM frauds by 2020; with the rate of increasing fraud in the channel and urged Nigerians to protect themselves  against phone-based frauds by ensuring phone lock, SIM lock, swap/recycle checks.

The Chief Executive Officer and MAXUT Consulting President, Mr. Mike Odusami, said the summit was organized with a view toward making the financial system safer for people.

He explained: “Our solution as a technology company is really about fraud prevention and making sure that this is the person the bank authorizes because most of the transactions are not physical, they are done through electronic channels.

“And also in the background, we are monitoring everything that is going on in the system, that is fraud monitoring and we have helped a lot of banks and financial institutions to do that.

“We are advanced; we are not lagging behind but because a lot of transactions are still done through the USSD channel, this is the normal feature channel and anybody can use it.

“Lots of frauds are done in that channel either through SIM swap, stolen phones and kidnapping. So, we are working with the banks to develop a solution to curb that”, Odusami added.

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