Over the years the level of fraud in the financial industry has continued to increase with the amount lost fraud expected to rise to around N20 billion for 2023. Already, N9.5 billion has so far been lost to fraud between January and July this year.
Mobile devises remain the channel with the highest number of fraud being perpetuated with betting platforms being the channel through which the most funds are lost. This calls to bear the need to increase identity management in the industry.
Giving the fraud data for 2023, the managing director of the Nigeria Inter Bank Settlement System (NIBSS) Premier Oiwoh noted that the industry recorded its highest actual loss value of N2.7 billion in January while June 2023 had the lowest value of over N800 million.
Oiwoh, who was represented at the 2023 Nigeria Electronic Fraud Forum (NeFF) annual meeting by the Chief Risk Officer NIBBS, Temidayo Adekanye, added that the highest fraud count in the last six months was recorded in May 2023 with 11,716 records while the lowest count was in June 2023 with 6,240.
He note that 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 increase land 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 8649 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.”
He further mentioned that in recent periods, scammers have developed a method to redirect funds via betting platforms and wallet accounts, resulting in minimal success rates for recovering those funds through these avenues due to insufficient identifications.
He said, “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 its cashed out, it is a black hole. There is no way you can recover that money. We’re talking about potentially 5 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.”
On how to address this, the chairman of NeFF who is also the director, Payment Systems Management of the Central Bank of Nigeria (CBN), Musa Jimoh, stressed the need to enshrine identity management in the betting industry as a way of curbing fraud.
“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 way 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.
“Fraud happens everywhere in almost all the channels and that is why collaboration is very important. We are working with everyone in the financial system extension to see if anyone is going to make a payment or to exchange financial service, you need to do due diligence to know who the person is and one of the things we have done to make this happen is the BVN which is based on biometrics.
“With that anyone that is taking money from any financial institution to make payment for betting, the betting companies should seek for their identity of that person because what is creating the problem is the anonymity that the platform provides so you don’t even know who is betting and so the fraud happens and you say present this person, they cant. Identification, ensuring that there is identity management enshrined in the betting wallet funding will take away all these criminals.”
