. Cyber attack loses likely to hit N7.2tn by 2021— Analyst
.We will ensure security of customers’ funds – CBN
Strong indications have emerged that electronic fraud known as ‘alert flashing’ or ‘fake bank alert’ has become a major source of concern to many bank customers in the country, resulting in the abandonment of about 15million bank accounts in 2019 alone.
The perpetrators of this financial fraud often make use of SMS disguised as a transaction alert from a bank to defraud unsuspecting victims, who love the convenience of mobile banking—but can’t identify if the App they’re using is fake.
Analysis of data from the apex regulator showed that the ugly incident finds a fertile ground in more than 90 per cent Nigerians operating below the poverty line, which significantly exposed them to cyber security risks.
However, this affects almost all the key sectors, putting the whole economy on the brink of collapse, if nothing is done to checkmate this anomaly.
Statistics from the Nigeria Interbank Settlement System show that Nigerians abandoned about 15 million bank accounts in 2019 as a result of economic hardship caused by sluggish economic growth, rising job losses and reduction in purchasing power occasioned by double digit inflation.
This means that in just one year, no banking transaction was performed in those bank accounts.
According to NIBSS, the number of bank accounts abandoned by bank customers that is now labelled as ‘inactive bank accounts’ rose by 30 per cent to 46.8 million in 2019 from 36.7 million in 2018.
The apex bank said an account shall become inactive if there has been no customer or depositor-initiated transaction for a period of six months after the last customer or depositor initiated transaction.
Investigations revealed that some Nigerians abandon their bank accounts due to unnecessary bank charges, while many do not like reduction in their bank accounts and when this happens, they tend to withdraw all cash from that account and never use it for transactions.
THREAT TO TELECOM COMPANIES
Analysts and telecommunication experts say this obviously poses a serious threat to telecom industries, as cyber attackers are targeting telecommunication companies with the intent to disrupt service delivery and infiltrate their data bank.
A telecommunication expert, Mr. Felix Akinwunmi, said customers are experiencing losses and inconveniences after their banks become targets of cyber frauds. Some innovations and banking applications, particularly, those that have single interface that can be used across multiple banks, are said to be part of the solutions heightening e-fraud in the sector.
According to him, the banking sector has been advised to invest more in intelligence gathering and information sharing if there is any hope of mitigating cyber frauds that come with digital banking and payment solutions, adding that the telecommunications sector is not also spared in the raging storm stoked by cyber fraudsters across the country.
BANK CUSTOMERS ASKED TO BE CAUTIOUS
Speaking on the development, President, Bank Customer Association of Nigeria (BCAN), Dr. Uju Ogubunka, who is also a former President of the Chartered Institute of Bankers of Nigeria, said cyber fraud does not affect banks alone, but also the confidence of the people in doing e-payment transactions.
Explaining further he said, “It puts a question mark on how one can trust that somebody actually has made a payment to you except you will call your bank or go back to cross check before you release whatever value you want to. Unlike before, when somebody makes a payment, if there is an alert, you assume that it is genuine. But with what is going on now, it is not going to be comforting for anybody to just make the assumption. In all this, the banking public must be cautious.”
An economic expert, Professor Edmond Adelaja, said cyber crime is a very challenging situation to grapple with, but added that consumers have options for protecting themselves.
“They should limit the amount of personal information they divulge online. They should make sure to always use sophisticated passwords on their accounts and not use the same password for multiple accounts. Additionally, they should conduct mobile financial transactions on secure networks, and never use public Wi-Fi networks,” he said.
CBN proffers solution
In all these, the Central Bank of Nigeria projected that electronic fraud losses in the banking industry would reach more than N6.1 trillion by 2021.
CBN Director of Consumer Protection unit, Mr. Sunday Salam-Alada, while speaking with a crop of financial journalists recently in Benin, said the volume and value of e-transactions are projected to continue to increase nationally and globally due to broader ecosystem scope, evolution of channels, modes payment and evolving technologies.
Salam Alade said the apex bank, through its Consumer Protection Department, had resolved over 14,815 complaints, which had resulted in the refund of about N86.2 billion to customers by the commercial banks, based on 25,043 cases of fraud in the last three years.
However, Industry statistics show that Nigeria is losing about N138billion to cyber-fraud every year.
A report by the Nigerian Electronic Fraud Forum also indicates that N2.19billion is lost to electronic payment fraud annually.
Assistant General Manager, Clients Services, SCIB Nigeria and Company Limited, Mr. Roberts Abodunrin, explained that NeFF had started looking into solutions that could address electronic fraud due to the success the firm recorded in providing similar solutions to mCASH.
“Sometimes when making payment online, it may not get to the intended owners and sometimes cybercriminals may have hacked into the payment system. The CBN has seen the exposure and is looking for the solutions that will take care of the exposure in the online payment gateway” he said.
CBN, Director of Banking and Payment System, Dipo Fatokun, said more efforts are being put in place to ensure security of customers’ funds.
“There has been an increase in electronic fraud despite the various efforts put in place to check it. It has become necessary to review and strengthen the existing rules and enact new regulations to combat electronic fraud in the country,” he said.