Banks Lament as Electronic Fraud Rises to N2bn
IMAGE: Mallam Ahmed Kuru, Managing Director/Chief Executive Officer of Enterprise Bank Limited »
The rising incidence of electronic fraud in the banking industry has remained a source of concern to operators in the industry.
Data gathered by the Financial Institutions Training Centre (FITC) showed that electronic fraud has been on an upward trend since 2010.
This is even more worrisome because the increase has been both in terms of number, volume and sophistication, as the fraudsters have adopted high powered technology.
Specifically, the total amount lost to fraudsters by banks in the first quarter of 2014 has been put at N2 billion.
Managing Director/Chief Executive Officer of Enterprise Bank Limited, Mallam Ahmed Kuru, revealed this in a presentation at the Nigerian Electronic Fraud Forum (NeFF) held in Lagos.
Kuru who was represented by the bank’s Head, Strategy and Corporate Transformation, Mr. Chuks Ekpunobi, urged banks to collaborate in order to eradicate e-fraud, which he described as a “common enemy.”
Furthermore, he expressed concern that bankers, auditors and internal control officials of financial institutions may not be as knowledgeable as the fraudsters themselves.
“Therefore if we are to make progress in this direction, banks need to as a matter of urgency, establish anti-fraud departments with staff that would always be ahead of the fraudsters in every sense of the word,” he said.
The Enterprise Bank boss stressed the need for every financial institution to take the issue seriously.
“The industry has lost about N2 billion to electronic fraud from the first and second quarter. Should this trend continue, about N5 billion would be the estimated loss by the end of 2014. If this is not checked, the trend will lead to unbearable levels of capital erosion in the system.
“The establishment of anti-fraud units will provide continuous improvement initiatives in fraud control and present a platform for the implementation of viable fraud management solution to highlight deviations of fraudulent transactions from normal transactions.
“It will ensure compliance to Payment Card Industry Data Security Standard (PCIDSS) initiatives of the Central Bank of Nigeria (CBN) as well as guarantee the implementation of other fraud control measures and security initiatives both on the network, and applications of the bank,” Kuru added.
Also speaking at the event, the Chairman of NeFF, Mr. Dipo Fatokun noted that fraudsters were always deploying strategies, saying that members of NeFF would continue to collaborate and discuss on how to bring the ensure that the activities of fraudsters are drastically reduced.
“It is reducing and it will continue to reduce. But for it to reduce further, we must think ahead of the fraudsters. You will all agree with me that there have been many cases of fraudsters that have been arrested and jailed.
“I want to assure you that the NeFF is in constant engagement with the Nigeria Police, especially the Special Fraud Unit, the EFCC and even the judiciary. The only thing is that as a regulator, you must be up and doing,” Fatokun who is also the Director, Banking and Payment System Department at the CBN said.
Article Credit: Thisdaylive