In February, the Nigerian Inter-Bank Settlement System (NIBSS) released the third quarter Industry Fraud Report, which found that Nigerian banks lost N3.5 billion between July and September 2020 to fraud-related activities. This represents a 534-percent increase from the same period in 2019.

It also means that more Nigerian bank customers lost more money to online bank criminals in the quarter than in previous years.

The highest number of fraudulent cases (35.5% of the total) was committed on the web channel – transactions that are done using a web browser – making it the channel with the most number of cases. It is followed by fraud over mobile devices. Transactions done over phones were responsible for a loss of N410 million at 11.7 percent of the entire loss value.

Experts say the rise in electronic fraud activities is because more customers now use electronic channels for their transactions due to intensified awareness from the banks (targeted to draw customers to digital platforms), the convenience of using e-channels, the effect of COVID-19, which promotes virtualization of many processes including banking, and others.

“Banks have done a good job; so more people are using e-channels for transactions. COVID-19 also made this adoption accelerate significantly. Unfortunately, not everyone is very sophisticated or even careful,” Adedeji Olowe, CEO of Trium and a trustee of Open Banking Nigeria, told BusinessDay.

Since 2014, when it introduced the cashless policy, the Central Bank of Nigeria (CBN) has intensified efforts with the release of new guidelines that encourage operators in financial services to push out more electronic-based products and services.

While e-payment channels and mobile devices grew and advanced, user education of the products and services has not grown at an equal proportion.

In order not to fall prey to this menace, Babs Ogundeyi, CEO of Kuda Bank, a digital banking company, advised the best way for customers to protect themselves was never to share their credentials with anyone.

“Don’t fall for phishing sites and most importantly, don’t participate in any get rich quick scheme. If it is too good to be true then it is most likely not true,” Ogundeyi said.

“Example, a large percentage of people who use debit cards still use their date of birth as their card PIN. Many people’s first name is still their internet banking password, some customers even use numbers as simple as 1234 as PIN or password to their accounts,” Ajani said.

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