How to Contain e-Payment and Electronic Fraud, By CBN, Others
Partnership, effective collaboration, information sharing amongst key stakeholders, and the need for a Centre for Cyber Information as well as global industry approach have been identified as some of the key drivers to combating e-payment and electronic fraud in Nigeria. This was the consensus as stakeholders, e-payment merchants and other participants converged for the 6th annual one-day payment systems and fraud conference organised by the E-payment Providers Association of Nigeria, E-PPAN, tagged: Hitting the Target: Addressing Electronic Fraud Through Industry Approach.
Speaking at the event which held in Lagos, the Executive Secretary/CEO, E-PPAN, Onajite Regha said the conference is designed to be a one-stop shop for payment and systems and fraud knowledge in West Africa. According to her, “electronic fraud is no longer a new crime but the ways in which electronic payment fraudsters operate has evolved significantly in recent years”.
She recalled the staggering revelation by the CBN in the Financial Stability report for December 2014, that the banking sector lost over N3.04 billion to electronic fraud, while other reports from newspapers also said a total of N199 billion was lost to e-fraud between 2000- 2014. This she said is worrisome and requires urgent attention since anyone can be a victim.
“As staggering as these figures are, the costs of fraud cannot be measured solely in terms of monetary loss. In order to significantly reduce fraud, it is essential to formulate a solid comprehensive approach and one of such approaches over the years that we have sought for in fighting fraud is a collaborative approach as we try to re-establish and re-energize this amongst key stakeholders”.
While collaboration, information sharing and partnership are important factors to this end, Dipo Fatokun, Director, Banking and Payment Systems Department at the CBN in a paper titled: Addressing Electronic Fraud through Industry Approach: Regulator’s Perspective said, “we know that these days no business can thrive without effective deployment of ICTs to gain competitive edge, yet many businesses are on the edge tackling electronic frauds on their electronic business platforms. Our world has gone full circle electronic and it did not leave crime behind.”
Mr. Fatokun also called for cross country collaboration amongst governments at combating the menace. He added that trends across the globe indicate that fraud is still largely driven by domestic transactions but that the challenge of the 21st century banker is in the management of funds for its customers using cutting edge solutions/technology to deliver services and ensuring the safety of customer funds in spite of growing cyber-crime.
“Incidence of fraud on non-electronic platform is increasingly negligible compared to the electronic platform. With cheques, fraud incidences are declining by 27% while PoS fraud incidences grew by 8200%.”
Frauds trends are therefore not likely to abate; the challenge is not for individuals, institutions or industry, but a national and global challenge, he said.
However, while the banks are at the receiving end customers who use all forms of card payment bear the brunt. This was also an issue raised by other participants on why customers bear most of the burden in cases of electronic fraud incidences, where skimming has been identified as the most predominant.
Author: Theresa Igata