To Make e-Payments More Acceptable, Nigeria Needs to Curb Fraud
By Victor Irechukwu
When a credit alert drops on your phone, chances are you will get excited. Even if it wasn’t a surprise and you were expecting that money. But when it is a debit alert, there’s also a certain type of gloom you feel; you want money to keep coming in but as little as possible of it going out.
It may be safe to say most of us feel that way.
Now, imagine the debit alert was for a transaction you know nothing about. A commonly reported theme has been alerts that your card was used to make deposits on a gambling website, whereas you may never have even indulged in gambling your entire life.
At other times, you are shown a debit alert by someone who wants to purchase goods or services from you, but only later realise they showed you what has now been termed ‘fake alerts’. By this time, your goods, for instance, would have been long gone.
In recent months, social media has been awash with reports of money literally growing wings and leaving some people’s accounts to those of other people without authorisation. Many of these cases have gone viral on social media, causing embarrassment for the banks involved – The issues are either quietly – or corrected with public acknowledgement. But not all are resolved, at least not yet.
As much as the country and even individuals would like to go cashless, these bad experiences leave a sour taste in the mouth, and they have continued to rain on the parade as Nigeria marches towards a cashless economy. It must be stressed that a cashless economy does not mean the theft of money will stop, what it does is to change how thieves go about it. But more importantly, it also doesn’t mean thefts must occur, at least not if systems are strengthened and the right protocols are put in place.
In the electronic world, an article on The Balance Money describes hackers as bank robbers and muggers, and in a cashless society, we are all exposed to them. According to the Nigeria Inter-Bank Settlement System Plc (NIBSS), growth in the use of electronic channels, specifically mobile devices, has also enticed fraudsters into focusing their efforts on these electronic channels.
When an attack is successful and the culprits are able to drain funds from your account, you could be effectively left stranded. God forbid you needed that money for a life-threatening emergency because that could be the end unless you are one of the lucky few whose funds get recovered in a place like Nigeria – and on time too.
Agusto & Co.’s ‘2022 Consumer digital banking satisfaction index for Nigerian banks’, found that approximately 59 per cent of respondents had been fraud victims on the digital platforms of their banks.
The figures in terms of the number of attacks, success rate and amounts lost remain a source of concern. By the third quarter of 2022, the total number of frauds & forgeries cases reported by Nigerian banks was 19,314 as against 27,356 incidents reported in the second quarter of 2022.
But there’s more. While the number of attacks represents a 29.40 per cent decrease between the periods, the total sum reported to be involved in fraud cases increased by 9.50 per cent to N9.62 billion from N8.78 billion in Q2 2022. Also, for the total amount lost due to fraud incidents, there was a significant increase of 207.94 per cent from N1.17 billion in the second quarter of 2022 to N3.62 billion in the third quarter of 2022.
In essence, the number of attacks may have decreased within that particular period, but more money was lost to the fraudulent attacks.
These insights were provided in the Q3 2022 report by FITC, an organisation mandated to receive data on fraud from all Nigerian banks and prepare quarterly reports. The figures show that the highest number of occurrences were recorded under computer/web fraud followed by mobile fraud which includes fraud activities through USSD transactions and ATM-related fraud.
BusinessDay even reported that every day between January and March 2022, there was an average of 450 incidents of frauds and forgeries against Nigerian bank customers. In those three months, the attackers targeted N14.65 billion, with Computer/Web Fraud responsible for N10.57 billion (72.18 per cent), and Mobile Fraud recording 1.48 billion (10.08 per cent).
Those 40,522 attacks resulted in N1.54 billion lost by bank customers. Computer/Web Fraud accounted for 70.51 per cent (N1.07 billion), followed by Mobile Fraud accounting for 17.58 per cent (N270.92 million) at the time.
Going back a bit, data by NIBSS also showed that fraud attempts via mobile channels saw a 330 per cent increase year-on-year (YoY) between 2019 and 2020, while attempts via web and POS channels saw a 173 per cent and 215 per cent increase YoY. In those nine months, 96 per cent of the attacks were successful, and there were 46,126 of such attacks.
“This trend is expected to continue as Nigeria further grows financial inclusion and customers become increasingly dependent on electronic channels for their day-to-day transactions,” said NIBSS. In other words, things are expected to get a lot worse, according to the organisation described as Nigeria’s central switch for the financial industry.
Fraud is and has always been a large threat to commerce and e-payment transactions. It is impossible to totally eliminate the chance of fraud, but applying timely measures and ensuring the use of secure payment infrastructure can help reduce or even eliminate these risks. Security should continue to be top priority for every party involved in ePayment transactions. Fraud prevention involves taking measures to stop fraud from occurring and taking steps to detect frauds quickly (when they occur) and stop them as soon as possible. Different techniques for preventing and detecting frauds are required as there are different types of fraud in e-payment transactions.
Awareness of these risks by merchants, consumers and individuals plays an important role in reducing fraud in e-payment transactions. Merchant awareness and education is important – they should be aware of the types of frauds, implications and application of best practices. Consumer awareness and education is also important in order to reduce identity theft or payment data theft. This would help the individual in adopting an active and cautious attitude when carrying out electronic transactions. It could teach them to be aware of possible risks, avoid e-scams, and minimise giving vital information to merchants (or other parties) when carrying out electronic payments.
Victor Irechukwu is the Head of Engineering at OnePipe
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Afreximbank, Nigeria’s Letshego Win at African Banker Awards 2023
By Adedapo Adesanya
The African Banker Awards 2023 Gala Ceremony, the most prestigious event in the African banking calendar, took place last night at the Rixos Hotel in Sharm El Sheikh, Egypt, on the sidelines of the African Development Bank Annual Meetings and saw African Export-Import Bank (Afreximbank) winning two awards.
The ceremony was attended by over 300 of the continent’s leading bankers, regulators, and policymakers.
Now in its 17th edition, the African Banker Awards celebrate the achievements of individuals and institutions that have contributed significantly to the growth and development of Africa’s banking sector over the past year.
The top highlight of the ceremony was Ms Esther Kariuki becoming the second woman to win the African Banker of the Year Award. The Head of Agriculture Business at the Co-op Bank of Kenya has been a central figure in advancing agriculture as a key asset class for her institution.
She was also responsible for considerably increasing lending to the agriculture sector and oversaw the roll-out of the platform Co-op Bank Soko, a digital marketplace that connects the agriculture value chain and ensures, among other things, that small-holder farmers receive a higher price for their produce.
Afreximbank won two prestigious awards in Sharm El Sheikh in recognition of its growing leadership within Africa’s financial services sector. The Cairo-based institution was celebrated as both African Bank of the Year and Development Financial Institution of the Year, making it the sole institution to win more than one award during this year’s ceremony.
Mauritius’ Mr Harvesh Seegolam wins Central Bank Governor of the Year. The youngest ever serving governor of Mauritius Central Bank was appointed at the onset of the COVID-19 pandemic.
He leveraged Mauritius Investment Corporation (MIC) to provide critical financial support to key sectors of the economy by investing in private sector operators. Its latest returns report demonstrated that the investments made through the MIC have increased in value, despite the challenging economic conditions faced.
South African banks swept many of the Deal of the Year categories. South Africa’s Mr Enoch Godongwana won the Minister of Finance of the Year Award. He was recognised for his steadfast management of the economy as finance minister as well as the work he has done to encourage investment to accelerate the energy transition.
Nigeria was also in the spotlight as Letshego Nigeria took the inaugural AFAWA Bank of the Year Award, a category spotlighting financial institutions empowering female entrepreneurs across the continent.
The Affirmative Finance Action for Women in Africa (AFAWA) is a pan-African initiative to bridge the $42 billion financing gap facing women in Africa.
The African Banker Icon was won by veteran dealmaker, Mr Miguel Azevedo, head of investment banking for sub-Saharan Africa, excluding South Africa at Citi. The lifetime achievement award went to another veteran banker, Mr Hisham Ezz Al-Arab, former Managing Director and current Non-executive Chairman of CIB Bank, Egypt’s largest private sector bank.
Speaking at the event, Mr said Omar Ben Yedder, Committee Chairman and Group Publisher at IC Publications, publishers of African Banker, said this year’s award ceremony is a testament not only to the vibrancy and dynamism of Africa’s banking industry but also its increasing diversity.
“The financial services industry continues to demonstrate excellence, innovation and impact in their respective markets and regions.
“FinTech, Climate Finance, and Cross-Border payments are all being shaped by the leaders we are recognising today.”
The ceremony is organised by African Banker magazine, with the African Development Bank as its High Patron. This year’s AfDB Meetings focused on mobilising private sector finance towards green growth. The 2023 edition was sponsored by the African Guarantee Fund, the Trade and Development Bank (TDB) and Tanzania’s CRDB Bank.
Full list of winners:
Banker of the Year
Ms Esther Kariuki, Co-operative Bank of Kenya
Bank of the Year
African Banker Icon
Mr Miguel Azevedo, Citi
Mr Hisham Ezz Al-Arab, Commercial International Bank
Central Bank Governor of the Year
Mr Harvesh Seegolam, Bank of Mauritius
Minister of Finance of the Year
Mr Enoch Godongwana, South Africa
Sustainable Bank of the Year
Nedbank, South Africa
DFI of the Year
Fintech of the Year
SME Bank of the Year
La Caisse des Dépôts et Consignations – CDC
Deal of the Year – Debt
Harmony Gold Company syndicated multi-tranche, multi-currency, loan facility of $400m and R4bn – Absa & Nedbank
Deal of the Year – Equity
$298m Infinity Energy equity investment and Lekela Power acquisition – Africa Finance Corporation
Deal of the Year – Agriculture
$78m funding facility for the Southern Oil Structured Commodity Finance Transaction – Absa
Deal of the Year – Infrastructure
$900m debt funding facility for Scatec Solar PV plus Battery Storage Project – Standard Bank
Regional Bank of the Year – North
Bank of Africa
Regional Bank of the Year – Southern
Zambia National Commercial Bank (Zanaco)
Regional Bank of the Year – East
Regional Bank of the Year – Central
Trust Merchant Bank
Regional Bank of the Year – West
AFAWA Bank of the Year Award
FBNQuest Merchant Bank Promises to Accelerate Revenue Growth
By Adedapo Adesanya
FBNQuest Merchant Bank Limited, the investment banking and asset management subsidiary of FBN Holdings Plc, witnessed resilience and growth amid a challenging economic environment in 2022.
The Chairman of the firm, Mr Bello Maccido, while addressing shareholders at the 8th Annual General Meeting (AGM) of the organisation in Lagos recently, expressed his satisfaction with the bank’s performance in the face of headwinds which created a challenging operating environment.
“2022 was a year filled with unprecedented challenges, but management’s resilience and the board’s keen oversight during the year resulted in the improved performance recorded.
“Our solid financial performance, growth across various business lines, and recognition through esteemed awards are a testament to our unwavering commitment to delivering value to our stakeholders,” he said while presenting the company’s Audited Financial Statements for the financial year ended December 31, 2022, to shareholders.
The bank recorded an impressive 312.5 per cent year-on-year increase in Profit Before Tax (PBT), with the growth driven largely by a 137.7 per cent increase in net interest income and a 34.4 per cent increase in gross earnings.
The bank’s commitment to cost optimization initiatives also helped to control operating expenses, which remained relatively flat year on year.
Speaking on this, Mr Kayode Akinkugbe, Managing Director of FBNQuest Merchant Bank, highlighted the bank’s strength and resilience during the challenging year.
He said, “The year 2022 was marked by significant economic turbulence, but we emerged stronger and more resilient. We were steadfast in our mission to Transform for Maximum Productivity by focusing on the strategic pillars of optimisation, innovation and partnerships, and this yielded positive results.
“We are proud of our achievements and remain focused on delivering exceptional value to our clients, employees, and shareholders.”
FBNQuest Merchant Bank received various awards and accolades in 2022, recognizing its excellence and contribution to the financial industry. These included the Banks and Other Financial Institutions Award for Infrastructure and Project Finance House of the Year, the EMEA Finance Africa Banking Awards for Best Asset Manager, and an ‘’A” rating from Agusto& Co., affirming the Bank’s stable outlook as a financial institution.
Looking ahead to 2023, Mr Akinkugbe acknowledged the macroeconomic and social challenges that Nigeria will face. Nevertheless, he expressed optimism about the improved outlook and opportunities for the bank’s various lines of business.
He stated, “We are dedicated to accelerating revenue growth purposely and responsibly. We will deepen our understanding of our evolving client base, offer novel products and services, pursue collaboration opportunities, and continue our digital transformation efforts.
“By remaining an employer of choice within our industry and nurturing high-quality staff, we will strengthen our position as a provider of investment solutions for all, a corporate and investment bank for entrepreneurs, and a trusted broker/partner for institutional investors.”
Access Bank Promotes Entrepreneurship Among NYSC Members
By Modupe Gbadeyanka
To promote entrepreneurship among members of the National Youth Service Corps (NYSC), Access Bank Plc has doled out N15.5 million to the participants of Batch A, Stream Two of the programme.
The beneficiaries, 55 in number, were chosen because they presented winning entrepreneurial ideas in Abuja, Delta, Kwara, Kaduna, and Rivers States.
“As an institution, we understand the role that young people play in the community and the nation, and we are committed to supporting their aspirations.
“We believe that the youths represent the future and hope of our nation. And we will do all we can to support their innovative ideas.
“Access Bank has been in a strategic partnership with NYSC since 2016. The relationship further evolved into the launch of Accessprenuer: The NYSC edition in February 2021.
“We have completed 13 editions of the Accessprenuer competition, impacting 490 corps members with N195 million seed capital.
“We have a Facebook community where the winners of these editions will interact freely amongst themselves and inspire young entrepreneurs with similar aspirations. The Facebook community has about 5,800 members,” the Group Head of Consumer Banking at Access Bank, Ms Njideka Esomeju, stated.
The star prize winner in Rivers State, Obot, who wants to go into the palm oil business, thanked Access Bank for motivating him with seed capital to realize his dream and have a brighter future.
Another winner from Abuja, Nifemi Ademola, who pitched on tomatoes harvesting and reproduction and won N700,000, said, “I really want to thank Access Bank for this initiative. The seed capital money I won today will really assist in expanding my business and also help me to acquire more tools that I need for efficient production in the future.”
One of the N400,000 winners in Kwara, Ugah Ebuka, said, “A very big thank you to Access Bank, and I pray that utilizing this cash for what it is actually meant for, my business will not just grow but be heard across the globe.”
The bank also rewarded other corps members across the country in the 3rd, 4th, 5th, 6th -10th positions with N400,000, N250,000, N150,000, and N100,000, respectively.
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