The decision of the Central Bank of Nigeria (CBN) to collaborate with the Chartered Institute of Bankers of Nigeria (CIBN) in the fight against internet banking fraud and other related cybercrimes, is a direct response to the increasing challenge that e-crimes pose to the banking industry and the economy. The Deputy Governor of CBN in charge of Financial System Stability, Dr. Joseph Nnanna, disclosed the plan at the 20th Investiture of the President/Chairman of the CIBN council.

He said the plan to work with the leadership of the banks has become necessary to ensure that financial transactions in the banking sector are secured. The proposed partnership between the apex bank and the CIBN has become even more urgent following the recent arrest of a professional internet hacker, who in his confessional statement, revealed that Nigerian banks do not have enough cyber security which makes it easy for hackers to have access to the accounts of high profile customers.

We are more concerned that our financial institutions, especially the banks could be at great risk, and our economy even worse off if the rising internet fraud is not contained.
The CBN should expedite action on the partnership and previous plans to check e-fraud in the banking industry. The economy is reportedly losing about N127bn annually to cybercrime.

According to the CBN half-year report 2017, the banking industry recorded 16,762 cases of fraud and forgeries involving N5.52bn and $0.124bn, compared with 9,164 cases involving N4.36bn in the corresponding period of 2016.

Also, the 2014 Annual Report of the Nigeria Deposit Insurance Corporation (NDIC) showed that between 2013 and 2014, fraud on e-payment platforms in the Nigeria’s banking industry increased by 183 per cent. More worrisome, a recent report in the United Kingdom-based Centre for Strategic and International Studies, claimed that cybercrime in Nigeria amounts to 00.8 per cent of our GDP. This represents about N127bn a year.

This is why the Cybercrime bill before the National Assembly needs to be reviewed in line with the present cyber security threats and passed expeditiously. Sequel to the interrogation of the self-confessed professional hacker, who was paraded by the police authorities in Lagos, last week, the Commissioner of Police in Lagos, Edgar Imohimi, advised banks to employ experts to secure their systems from internet fraudsters. That advice should be heeded.

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In addition, the CBN should commence the establishment of the e-fraud risk information centre it announced since 2015. The planned centre came on the heels of the revelation that the sector lost N203bn between 2000 and 2014. That figure had since increased, according to the NDIC. The centre, modeled after that of South Africa, offers useful insights into the modus operandi of internet hackers in the banking industry and how to check it to the barest level.

This innovation, which has come at the right time, should make the establishment of the e-fraud risk information centre a matter of priority. This is urgent considering the increasing growth of e-payment transactions in Nigeria. The CBN and the leadership of CIBN should be mindful of the fact that e-fraudsters have developed sophisticated devices to shut down the software of some financial organisations, sometimes for an hour or more, a window period reported to be enough to carry out a successful cybercrime operation.

A security assessment of Nigerian banks, a few years ago, showed that
e-fraudsters deployed over 185 fake mobile applications on the websites of about 15 commercial banks across the country and extracted customers personal and financial information with the intent to defraud them of billions of naira. CBN statistics show that the e-fraud transactions have been on a steady rise since 2013.

There is no doubt that the rising cases of internet fraud poses a big threat to stability in the banking industry. The solution should be multifaceted, including training professionals in anti-hacking operations. The e-fraud risk information centre should have a mechanism to dictate ‘abuse’ within the banks because very often the fraud is aided by some bank employees. This also calls for the strengthening of the banks’ internal control systems by getting the necessary hardware and trained professionals to man them. The Payment Card Industry Data Security Standards (PCIDSS) is one of the latest devices to check internet fraud.

Considering the important role of the banking industry in the economy, and the fact that cybercrime has become a menacing phenomenon, it should be tackled frontally. Owing to the fact that it was not captured in our Criminal Code Act, there is need for a new tough law that the police and the anti-graft agencies can work with, to effectively deal with the crime.