Written By: Prof. Anthony Eze

The recent 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 indeed commendable. This is a direct response to the increasing challenge that e-crimes pose to the banking industry and the economy. Thus, 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 notorious internet hacker, who, in his confessional statement, revealed that Nigerian banks did not have enough cyber security, which makes it easy for hackers to have access to the accounts of high profile customers. It is more worrisome that the financial institutions, especially the banks could be at great risk and the economy even worse off, if the rising internet fraud is not contained.

The CBN should expedite action on the partnership and other plans to check e-fraud in the banking industry. The economy is reportedly losing about one hundred and twenty-seven billion naira annually to cybercrime. According to the CBN half-year report 2019, the banking industry recorded about seventeen thousand cases of fraud and forgeries within the period.

More worrisome is a recent report in the United Kingdom-based Centre for Strategic and International Studies, which claimed that cybercrime in Nigeria amounted to point eight per cent of our GDP. That is why the Cybercrime bill before the National Assembly needs to be reviewed in line with the present cyber security threats and passed expeditiously. The notorious hacker, who was paraded by the police in Lagos, even advised banks to employ experts to secure their systems from internet fraudsters. That advice should be heeded. 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.

The 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 banks should be mindful of the fact that e-fraudsters have developed sophisticated devices to shut down the software of some financial organizations, sometimes for an hour or more, a window period reported to be enough to carry out a successful cybercrime operation.

Investigations show 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. There is no doubt that the rising cases of internet fraud pose a big threat to stability in the banking industry.

The solution should therefore 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.

Considering the importance 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.

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