E-Financial
Bank Insiders Help Fraudsters Steal Billions
Despite multiple security checks in banks, incidents of fraud are on the increase, prompting the Central Bank of Nigeria (CBN) to raise alarm, blaming it on insiders.
A report by Weekly Trust takes a look at the disturbing trend.
According to Weekly Trust, since e-banking commenced some years ago, banking operations and services to customers have been made easier.
But despite the smoothness and comfort on offer, there are also setbacks and risks the banks and customers face from time to time. Investigations indicate a rise in fraudsters cashing in on modern technology to fleece unsuspecting depositors.
Weekly Trust spoke to a banker in one of the leading commercial banks in Nigeria, who craved anonymity, and he confirmed the rise of insider collaborators in fraud. He noted that the network of criminals is so strong that it is extremely difficult to pin down the culprits.
The source said the most elementary aspect of the fraud is wilful neglect of checking and confirmation of personal data and addresses of fresh bank customers who want to open new accounts.
“There is a policy called “Know Your Customer” (KYC). It is expected that any person who comes to open a new bank account is only granted that opportunity upon confirmation by his account officer the accuracy of the information he has rendered in his personal data form, especially his office and residential address. But in most cases, customers who are fraudsters who come to open accounts and have connivers within, give fake information,” he said.
“Without necessary confirmation, the conniver goes ahead to open such accounts, which are used in defrauding people. In effect, when fraud happens, the suspects cannot be located with the addresses in personal data forms. He stands a better chance of evading prosecution at this point,” the source added.
Another source disclosed that would-be fraudsters who have insiders approach the bank with account numbers and other details of persons they know are flush with cash.
“They come and pretend that they have forgotten the signature they signed for the account in question. They request that the manifest be opened for them to see their signature and remember. Once the insider opens the manifest, the fraudster could also request to snap the signature with his phone, under the pretext that he doesn’t want to forget it again. These are questionable demands, but the insider grants it because they are in collaboration. Of course, we know there are expert forgers,” he explained.
In another case, a man who operated an account with a commercial bank (name withheld) with a heavy base in the North had N2.1 million withdrawn from his account by fraudsters.
The man, who pleaded anonymity, said he had N3.2 million in his account and went to withdraw N200,000.
He had not withdrawn cash for a while, noting that the transaction was done. But since his GSM number which receives SMS alerts was inoperative, he requested for written balance, only to discover that N2.1 million had been withdrawn.
“I raised alarm and upon investigation by the management of the bank, it was discovered that someone forged my bank documents, impersonated me with an identity card and also cloned my GSM line. The money was transferred into an account in Abuja, but I couldn’t get the alert. The bank later discovered I never made the transfer or withdrawals and refunded my money, but it suspended the cashier who authorized the payment,” the victim said.
Weekly Trust gathered that fraud within the banking sector manifests at different levels and it is systemic in nature.
A source said bank staff would not ordinarily open doors for a thief to come in and steal money from the vault.
He said what obtains is that corrupt bank staff carefully arrange for a lapse to occur, so they can explore that window.
Also, a recently retired senior manager with one of the old generation banks who prefers to be identified simply as Mustapha said experience tells him it is almost impossible to hit any bank without internal assistance.
“One of the common examples of fraud amongst the top officers of banks is in approving fraudulent loans for their proxies. They register companies in the name of their friends or families, put documents together and approve huge sums to these companies which largely exist only on paper.”
Then they go ahead to approve all manner of concessions and waivers, practically giving themselves these monies, robbing the bank of legitimate income. Billions of naira get stolen this way, accumulatively.
Investigation also revealed that even where these companies truly exist with verifiable business on ground, they cannot access bank loans on record time without reaching a compromise with the bank officials on what percentage they will get as kick-backs.
“In doing so, even where there are danger signals to warrant reconsideration, they will be overlooked and approval will be given,” another source added.
A chartered accountant and auditor, Mr. Sunday Enenche said a good number of the high-profile fraud cases are executed by top management staff of banks, with bank management using their branches to warehouse large sums for politicians and other highly placed individuals in the society.
According to him, these monies are not captured in the books of the banks because they could raise suspicion by the Economic and Financial Crimes Commission (EFCC), saying it denies the bank of income.
“With the cooperation and understanding of the bank management, they move these sums around from time to time to avoid Central Bank of Nigeria’s (CBN) unscheduled inspection. You will rarely see the real owners of these monies in the banking hall, as they have their agents who are well-known by the banks and can access these monies at any time of the day,” he added.
Worried by the increasing cases of fraud, the CBN on January 19 through a circular issued a directive urging banks to take steps to curb the trend.
The directive, signed by Mr. Dipo Fatokun, Director, Banking and Payment System Department, also stated that the abuses center on identity theft and abuse of authorization.
The apex bank therefore announced measures to check such and gave a December 31, 2015 time limit for compliance by all banks or a N50,000 fine daily after the expiration of the deadline.
Experts argue that what you get with the lower ranks of bank officials is not frequent and they also come in various forms because the opening is not always there.
They insist that in some cases, double deductions occur on same amount on an account where the customer has made same type of deductions, by not crediting the customer’s account with deposits, yet issuing a teller to the customer.
They could also connive with robbers to hit the banks premises or bullion vans if they notice that guards are loose on certain days or times. There are also cases of signature forgery and altered cheques.
But Mustapha cautioned that whereas banks keep updating their fraud counter-mechanisms, a lot more depend on the integrity and prudence of the staff to succeed.
The banks may need to also reconsider the current practice of contract workers who handle transactions far above their pay grades.
“You cannot employ a graduate, place him on contract and pay him less than 50 percent of what a similar graduate in the same system earns, who is not on contract. Temptation will be there.”
The sixteenth season of DiamondXtra, a savings and reward account where customers of Access Bank are rewarded with several prizes, have been unveiled in Lagos.
L – R : Doris Okpara, Product Manager, DiamondXtra; Ngozi Igboanugo, Regional sales Manager Festac 1&2 & mainland Access Bank; Bolarinwa Animashaun, Regional Sales Director Lagos 2 Access Bank ; Emeka Ezikeugo, Diamondxtra N200,000 Onsite winner; and Adaeze Ume, Head Consumer liabilities, Access Bank during the launch of Diamondxtra Season 16 held at Alaba International Market Lagos yesterday.
The Season 16th of the special interest yielding hybrid account which allows deposit of both cash and third-party cheques has been upgraded as customers will win prizes to the value of N200 million and three SUVs, amongs other mouthwatering prizes.
Speaking at the unveiling in Alaba International Market, Lagos, Mr Bolarinwa Animashaun, regional sales director, Lagos, said the new season will bring more goodies to the customers as the bank has taken their interest at heart.
“In the last fifteen years, we have been able to ensure customer loyalty, reward committed customers over time and show that we are a bank that is ready to empower people and partner with people.
“If I take it into specific figures, we have rewarded 26,696 customers and we’ve given a total sum of N6.5 billion over the period.
This Season16is interesting, because, we have seen a lot of opportunities to expand into digital opportunities and this time around, we will be rewarding 15,786 customers, and 10,000 of them will be digitally rewarded.
“This is almost half of what we have done over the last 15 years. So that is what is making it special. We have takenit into the possibilities of how technology can expand our business and reward customers”.
The draws for the new season are going to be the same like the previous ones as it will be held in different regions.
“So, we start from the monthly draws, quarterly draws and the annual draws. What makes it extremely interesting this year is that we will be rewarding with up to N200 million in prizes and we have added some very interesting gifts. We will be given out three SUVs as part of the N200 million price for this year”, Animashaun added.
At the unveiling, Access Bank conducted onsite draws where 48 customers who have DiamondXtra accounts and were present at the unveiling won cash prizes ranging from N20,000 to N200,000.
Breakdown shows 40 customers won N20,000 each, five customers won N50,000, two customers won N100,000, while one customer went home with N200,000.
Among winners of the N20,000 prize was Mr Victor Edobor, who said he opened the DiamondXtra accounts 24-hours before the draws.
One of the two winners of the N100,000 prize, Mrs. Maureen Nneka Oforka, said she was surprised to have won at the well-attended event as that was her first time winning any prize.
She said, “I have never won any prize in my life. This is my first. I came here reluctantly and thank God, I am here and I am a winner of N100,000 which has already been paid into my account.
The grand prize winner of N200,000, Mr. Emeka Ezikeugo, a trader in Alaba, said. “I will forever be grateful to Access Bank for the prize as I was not expecting it. I thank the bank for showing leadership among its peers”.
To be part of the winning train and qualify for the DiamondXtra season 16 which is open to both new and existing customers, new customers are required to open a DiamondXtra savings account with just N5,000 by dialling *901*5# or walking into one of our branches to open the account.
However, the more multiples of N5,000 both new and old customers save, the higher their chances of winning at the monthly, quarterly and annual draws.
DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The DiamondXtra reward scheme has given away over N6.5 billion in cash and household items to over 15,000 loyal customers over the last 15years. Please click HERE to learn more.
Recognising the underrepresentation of women in the technology sector, Lafarge Africa Plc, has launched the Girls in Tech Program, a pioneering initiative aimed at empowering young women in technology.
Meticulously crafted to bridge the gender gap in tech and empower 10 young females between the ages of 18-25 years from Lafarge Africa Host communities in Cross River State, the program is poised to make a significant impact in the region.
The Girls in Tech Program seeks to harness the unique talents of these young women and introduce them to the dynamic world of technology. By providing them with essential skills and opportunities, the initiative aspires to equip them to become self-reliant as well as problem solvers in society.
In collaboration with Aptech and Arena Multimedia,globally recognized leaders in technology incubation and opportunity, as well as The Bridge Leadership Foundation, the boot camp promises to be a transformative experience for the participating girls, who are eager to make their mark in the tech industry.
Speaking during the onboarding to flag-off in Calabar recently, the Plant Manager, Lafarge Africa Plc, Sotirios Valsamakis, who was represented by the Human Resources Business Partner, Lafarge Africa Plc; Barong Ita, revealed that the program was in line with the company’s commitment to diversity and inclusion.
She also added that the initiative is designed to ignite a spark of inspiration, hope, and possibilities in the heart of the selected girls across the host communities.
“As an organization, people are an integral part of our sustainability drive, and we are invested in building lasting progress by empowering members of our host communities. We also recognize the need for greater and greener diversity and inclusivity within the tech sector.”
Today’s event is not just about launching a program. It is about igniting a spark of inspiration, hope, and possibilities in the hearts of these young women. It is about challenging stereotypes.”
Also speaking at the event, the Cross Rivers State Commissioner for Science, Innovation & Technology, Justin Beshel represented by Edwin Adie, Technical Senior Advisor, Cross Rivers State Ministry of Science & Technology commended Lafarge Africa for the initiative adding that it is in line with the State government’s plan towards science, technology and innovation development.
As the country faces economic challenges, the need for adaptive strategies in the fintech industry becomes paramount. In line with this, leading Fintech startup, Hydrogen Payment Services Limited (‘Hydrogen’), has teamed up with Co-creation Hub (‘CcHub’) to host an insightful event themed, ‘Adapting Fintech Business Models to Economic Climes’.
The event, set to take place on Thursday, April 18, 2024, from 12:00 WAT at the CcHub office in Sabo, Lagos, will delve deep into the intricacies of Nigeria’s economic challenges and how these influence the fintech ecosystem.
Participants will gain actionable insights on how to adapt fintech business models to volatile economic conditions by prioritising flexibility, agility, and customer-centricity.
This collaboration underscores the shared commitment of both entities to empower aspiring founders venturing into the Fintech space amidst economic uncertainties.
By leveraging their respective expertise and resources, Hydrogen and CcHub aim to equip emerging entrepreneurs with the knowledge, tools, and support needed to thrive in today’s dynamic economic conditions.
Emeka Awagu, Chief Technology Officer at Hydrogen, commented on the strategic partnership with CcHUB: “Our alliance with CcHUB amplifies our shared commitment to pioneering transformative solutions in Nigeria’s fintech sector.
“By leveraging Hydrogen’s technological expertise alongside CcHUB’s innovative approach, we are primed to set a new standard for fintech excellence and drive impactful change across the industry.”
The event will feature a distinguished panel of industry experts and thought leaders, including, Ina Alogwu, Group Director, Digital Transformation, ARM HoldCo; Emeka Awagu, Chief Technology Officer, Hydrogen, and Miracle Ezechi, Digital Marketing Manager, Hydrogen.
The panel discussion will be moderated to encourage an engaging and insightful conversation on the strategies and innovations required to thrive in Nigeria’s Fintech landscape amidst economic challenges.
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