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CBN Unveils Cyber Security Guidelines for Banks

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Central Bank of Nigeria (CBN) has released a draft risk-based framework and guidelines on cyber security for deposit money banks and payment service providers (PSPs).

 

A publication signed by Kola Balogun, director of banking supervision, CBN, noted that the requirements were in light of a recent increase in the number and sophistication of cyber security threats against banks and PSPs.

 

“It has become mandatory for these institutions to strengthen their cyber defenses if they are to remain safe and sound,” the statement read.

 

The draft guidelines stipulating minimum requirements ranging from cybersecurity self-assessment tools to reporting templates were thus released for comments and inputs from these financial institutions on or before July 31, 2018.

 

“In recent times, cyber security threats have increased in number and sophistication as DMBs and PSPs, use information technology to expedite the flow of funds among entities.

 

“In this regard, threats such as ransomware, targeted phishing attacks and Advanced Persistent Threats (APT), have become prevalent; demanding that DMBs and PSPs remain resilient and take proactive steps to secure their critical information assets including customer information that are accessible from the cyberspace.

 

“It is in this regard that this framework, which outlines the minimum cyber security baseline to be put in place by DMBs and PSPs, is being issued.

 

“The framework is designed to provide guidance for DMBs and PSPs in the implementation of their cybersecurity programmes towards enhancing their resilience.

 

“Cybersecurity resilience is considered as an organisation’s ability to maintain normal operations despite all cyber threats and potential risks in its environment. Resilience provides an assurance of sustainability for the organisation using its governance, interconnected networks and culture.

 

“DMBs/PSPs should note that for a cybersecurity programme to be successful, it must be fully integrated into their business goals and objectives, and must be an integral part of the overall risk management processes.

 

“The framework provides a risk-based approach to managing cybersecurity risk. The document comprises six parts: Cybersecurity Governance and Oversight, Cybersecurity Risk Management System, Cyber Resilience Assessment, Cybersecurity Operational Resilience, Cyber-Threat Intelligence and Metrics, Monitoring & Reporting,” the circular noted.

 

 

 

 

 

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E-Financial

Experts Urge Banks to Invest in Data Authentication to Boost Financial Inclusion

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Investing in data authentication and detection software by the banks and other financial institutions would lead to the expansion of loan database, improve services and boost financial inclusion.

Bade Adesemowo, Chief Technology Officer [CTO] of Social Lender,  said that the company’s platform has the capacity to authenticate loan applicants’ data based on social reputation before authorization by the banks and financial institutions.

“Our solution is trained to detect fake data in most cases. As such, utilising and optimizing our innovative service will boost financial inclusion and bring more development to the financial sector. Our system is actually training itself – machine learning – based on data we have acquired to improve performance of transactions on the system”, he said.

According to him, Social Lender provides customers of financial institutions access to microcredit based on their social reputation in their community. The unbanked and under-banked with little or no access to formal credit can also benefit. He said the company focuses on social reputation on mobile, online and social communities.

The fintech expert stated that the platform was designed in such a way to provide loan applicants’ data on the social community to banks and other financial institutions irrespective of locations.

He said that there is a need to “close the huge financial exclusion gap” and expand the options for financial institutions in data gathering for loan applicants before authorization.

He informed that established global financial institutions use credit history, credit bureau data and credit scores to arrive at lending decisions.

“This is a challenge in Nigeria, as less than 10% of the adults have viable credit bureau data and in Africa less than 50% have this required data. Even in America, 20% of the adult population lack access to formal credit.

“That is a significantly smaller market size, but a market gap all the same. This is where Social Lender comes in. There’s a need for an alternative measure of trust for the huge population. This alternative scoring solution is Social Lender’s Social Reputation Score”.

Speaking in a similar vein, Product Owner of Social Lender, Mudi Ogboru said financial technology is a viable tool that has the capacity to reach the unbanked individuals in the country.

“Banks today are serving about 40 million unique individuals in a country of about 200 million unique individuals. Fintech stakeholders can collaborate and build a strong network to deliver financial services to over 100 million Nigerians who the banks are not serving”, he said.

The CEO of Social Lender, Faith Adesemowo informed that the company has collaborated with several fintech firms to create healthy competition in the industry, saying that the company is focusing on expansion to other countries to propagate financial literacy and inclusion.

Social Lender is a lending solution based on social reputation on mobile, online and social communities. The company helps financial institutions offer microcredit based on social reputation to individuals who are under-banked or have little or no access to formal credit.

The solution is designed to bridge the gap of immediate fund access for people with limited access to formal credit. Social Lender uses its own proprietary algorithm to perform a social audit of the users’ online, on mobile, on social media and other related platforms and gives a Social Reputation Score to each user.

“Loans are guaranteed by the user’s social profile and network allowing users to then borrow from banks and other financial institutions based on their social reputation”, she said.

The company is improving access to financial services across Africa using social reputation.  Beyond lending, Social Lender has multiple use cases in various sectors including by not limited to the in other areas including but not limited to KYC, insurance and so on.

It is building a social network for trust, credit and much more. It has partnership agreement with three financial institutions in two countries through Sterling Bank (Nigeria), Absa / Barclays Bank (South Africa), and iTrust (Nigeria). It is considering similar initiative with four banks in two countries.

The CEO said the company is accessible on multiple channels which include SMS, USSD and Web. Recently, Social Lender launched a USSD only channel in Nigeria targeting low income communities.

Social lender is seeking to raise $1 million in equity or convertible note to expand staffing, implement and integrate more technology interfaces, expand its brand and marketing reach, and to expand into new markets and countries of operation.

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E-Financial

4 Men Hack into FCMB Database, Steal N1Bn

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Four suspected hackers were arraigned before an Igbosere Magistrate Court, Lagos for allegedly stealing the sum N1billion from accounts belonging to customers of First City Monumental Bank (FCMB).

 

The alleged hackers were identified as; Gideo Olatimeyin, 33, Osita Martyns, 37, Daramola Samuel Akanji, 23, and Abiodun Aina, 38.

 

The men, who all pleaded not guilty, were arraigned on a four-count charge brought against them by the Special Fraud Unit (SFU) of the Police.

 

The police alleged that the accused persons conspired, stole and effected an unauthorised modification of bank’s computer data by increasing the transaction limit.

 

However, the offence committed is punishable under section 287(9)(c), 390,411 and 388 of the Criminal Law of Lagos State,2015.

 

According to the charge, the accused persons and “others at large on March 10, 2018 did conspire amongst yourself did steal the sum of N900,775,757.47 property of various customers of the bank by transferring the funds from their FCMB accounts to various different accounts outside the bank via POS and ATM”.

The police also alleged that the defendants gained access links to the debit card platform and profile of FCMB bank through the profile of a contact centre staff and effected unauthorised modification of the bank’s computer data by increasing the transaction withdrawal limit.

 

However, Magistrate Folashade Botoku, therefore, granted them bail in the sum N20 million each and two sureties in like sum.

 

She ordered that one of the surety must be a traditional ruler.

 

The magistrate thereafter ordered that the defendants be remanded in Kirikiri prison custody the pending perfection of their bail condition.

 

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E-Financial

How 13,000 people save N7bn through Wema Bank’ ALAT Goal

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Wema Bank has stated that its first fully digital bank ALAT Goals launched a year ago has helped 13,267 people save over N7 billion with an average monthly savings of N1 billion

 

The bank noted that with the App, over 280,000 ALAT accounts have been opened since May 2017 with more than N2.2 billion in deposits realized.

 

In a statement announcing the outcome of a survey on saving in Nigeria carried out by ALAT, the bank said it discovered that the greatest drawback to effective saving was not insufficient income, but that many do not know how to save, while others lacked discipline.

 

The statement read in part: “Understanding this, ALAT unveiled a feature called Goals, a bouquet of savings options that help instill discipline while rewarding you for reaching your savings milestones. There are three categories of savings goals.

 

The Fixed Goal which serves those seeking a strict savings plan; Flexi Goal for those in need of a not-too-rigid plan; and Stash which caters to those seeking a rewarding short-term savings option.

 

Groups of friends or members of families can pull funds together and save towards a single goal using the Group Target Savings or the Rotating Group Savings popularly known as Esusu, earning a 10 per cent annual interest – three times the standard bank rate. “Since Goals on ALAT was launched a year ago, the digital bank has helped 13,267 people save over N7 billion, with an average monthly savings of N1 billion today.”

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