Nigeria:EFCC: POS, ATM, Mobile Banking Easy Target for Cyber Criminals

As the Central Bank of Nigeria and other regulators in the Nigerian financial landscape continue to push forward in the campaign for the adoption of electronic payment system, the Economic and Financial Crimes Commission (EFCC) has disclosed that as at 2014, Point of Sales, Automated Teller Machines and Mobile Banking platforms were the major avenues by which cyber criminals operated to defraud banks and depositors.

An official of the crimes commission, Mr. Ibrahim Shazali, who quoted a publication of the Nigerian Banks Settlement Scheme (NIBSS), noted that the adoption of electronic banking system in Nigeria has come with a corresponding sophistication in banking frauds.

He spoke in Ilorin at a recent seminar for business editors and financial journalists on mobile payment system in Nigeria.

According to the data made available, while two POS-related fraud cases were recorded in 2013, the figure rose to 166 in 2014, a 8,200 per cent increase.

Also during the period, while the number of ATM-related fraud cases reported in 2013 was 147, the number of incidence recorded in 2014 was 491, representing a 234 per cent increase. Mobile banking-related fraud incidents in 2013 were eight while the figure rose to 21 last year.

He put the total amount of money lost to the fraudsters through these platforms at N485 million through electronic platforms in 2013 whereas the figure rose to N6.2 billion last year.

The breakdown of the losses showed that, while N5.8 million was lost to frauds through the use of POS in 2013, N157.6million was the figure lost in 2014.

From ATM usage, bank customers lost N55 million in 2013 while the figure rose to N2.7billion last year, representing a 4,789 per cent rise.

Depositors also lost N6.8 million through the activities of fraudsters using mobile banking in 2013 while the figure rose to N13.3 million in 2014.

He explained that the attacks by cyber criminals are on the increase because the adoption of online payment system has necessitated banks to make huge amount of sensitive personal data readily available to customers, clients, vendors and employees through various platforms especially those with the risk of compromise.

In a related development, the CBN has forecasted that Nigeria stands to reap $900 million from electronic banking usage by the year 2020.

Head, Financial Inclusion Secretariat of the CBN, Mrs. Temitope Akin-Fadeyi, at the seminar, gave the forecast.

She said the amount, which represents the benefits of electronic payments, will be reaped through reduced leakage of funds, better access to financial service and lower transaction costs.

According to E-banking statistics for the period between 2012, which she presented to financial journalists, electronic fund transfer which was N13.6 trillion in 2012 increased to N14.6 trillion in 2014, representing 7.5 per cent.

While N48 billion was the total value of transaction through POS in 2012, the figure rose to N312 billion in 2014.

Meanwhile, 21 mobile money operators have been fully licensed and are already carrying out commercial operations, while eight others are at various stages of pilot run. Out of these operators, seven were bank-led while 14 were non-bank led.

This data, which was released by CBN Director of Banking and Payment System department, Mr. Dipo Fatokun, also showed that as at September 30, 98,158 mobile agents were enrolled, with the total number of subscribers put at 24,389,263.

According to him, the total volume of transactions was 76,952,409 while the total value of transactions was N815, 464,917,062.94.

He listed product offerings through these agents to include cash-in/cash-out, bill payments, funds transfer and airtime top up, among others.