Nigeria Ripe for Automated Self Cheque System

Encouraged by the deep penetration of ATM in the country, Mr. Yele Okeremi, the Managing Director and Chief Executive Officer of Precise Financial Systems (PFS) has declared that self-service cheque deposit and management is inevitable in Nigeria, saying that the country’s financial market is mature enough for the system.
According to him, the condition needed to achieve self service cheque deposit system is minimal IT knowledge and personal confidence that the system will deliver what it deposits into depositors accounts.  “As we can see, ATM penetration in Nigeria has been high, therefore, it follows that if we make the system easy and friendly for users, the people will embrace and love it. As a matter of fact, self service cheque deposit and management is
inevitable in Nigeria,” he said.
He added that since banks need to look inwards, find means of reaching and serving their customers in an excellent manner, and still maintain a very lean structure, the concept of self service as it has been designed, would enable the banks to provide convenience retail banking services for customers.
On the fear of fraud, Okeremi argued that the automated self cheque processing will not become an easy target for cheque fraudsters. He explained that the DEPOTEL, the self service cheque deposit system developed by PFS makes it more difficult to perpetrate frauds or game the system.
“There are two conditions precedent to successful fraud and corruption as the case may be. They are monopoly of knowledge or information and concentration of discretion at the disposal of one person or a group of people. Our system has eliminated both possibilities. Therefore, you have a safer and more transparent system than the conventional management of cheque transactions now. We have a system that is capable of identifying more than 97% of fraudulent activities or gaming than the conventional means,” he explained.
According to him, DEPOTEL attempts to eliminate all known cheque frauds dynamics today. He said the beauty of a system is in its agility and this totally depends on the competence and knowledge of its designers and developers. PFS the knowledge of the processes involved and the agility to quickly respond to new discoveries as they arise and we shall continue to improve as new patterns unfold.
However, he noted that though the introduction of several electronic channels has given options to users to effect payment using any channels that suits them at a particular point in time, cheques remain a viable means of effecting payment in modern societies.  While addressing the problem of cheque fraud in the system, Okeremi noted that cheque frauds remain a major concern particularly in Nigeria.
“But I’m glad to say that so much has been achieved towards reducing, if not eliminating cheque frauds in the system. If you look at cheque frauds in historical perspectives in Nigeria, you will see several types and variants of cheque frauds ranging from outright forgery of cheque leaves and cheque cloning to cheque transaction suppression, signature and mandate forgeries, cheque alterations and clearing cheques substitution to cheque diversions. I hope to be able to explain the intricacies and dynamics of these various frauds in detail sometimes in the future.”
He warned that while some of these frauds can be handled by the introduction of technology, some of them still require caution and due diligence on the part of banks. He, therefore, listed two major factors that have ensured to reduce cheque frauds considerably.
These are the introduction of the Nigeria Cheque Standards, which stipulates the minimum standards for physical and chemical composition of cheque leaves across all banks in the country coupled with the effort of Nigerian Inter Bank Settlement System (NIBSS) at reducing the number of clearing days of both local and upcountry clearing cheques.
According to Okeremi the combined effect of these two factors has frustrated the efforts of fraudsters. In fact, the most common cheque frauds that remain alive today are cheque substitutions and attempted cheque cloning.
“I have spent considerable time as a consultant, working with the banking industry and I can confidently tell you that we are moving closer by the day to nailing down the issues involved in these issues and eliminating them”, he said.
Cheque substitution frauds will be almost, if not eliminated when banks begin to process their outward cheques in a decentralized manner at the point of transaction, thereby being in a position to capture the names of the beneficiaries of individual cheques and submitting same to NIBSS in their individual capture files.
“This will guarantee that every bank will have access to all details of the transactions in their individual posting files even before seeing the physical instruments,” Okeremi further explained.