E-Financial
Nigerian Banks Detect 46% eFraud via Customer Complaints
About 46% of cyber incidents are detected through customer complaints, according to Nigerian Cyber Threat Barometer report 2014
This was disclosed by Bukola Smith, head, Payment Sub-committee, Committee of internal Auditors of Banks at E-PPAN 5th e-fraud conference in Lagos, while discussing the “Industry Role And Responsibility In The Criminal Justice Process Of Electronic Fraud”, adding that insider collusion with external parties is identified as one of the likely sources of cyber security breaches in the Nigerian financial services sector.
Smith who doubles as the divisional head, Group Internal Audit, FCMB, said that report shows top cyber vulnerabilities include lack of awareness amongst customers and employees and social engineering, identity theft and social media are the top emerging threats to Cyber security in Nigeria.
She said, “Financial services and banking today is no longer confined to the Banks’ business premises. Most banking transactions are carried out online over the internet or via the use of technologies such as ATM, PoS, Mobile Banking, electronic funds transfer etc. In view of the CBN financial inclusion strategy, Agent banking and virtual banking are being imbibed in Nigeria.
“However, this rapid technological evolution now poses significant threats to the electronic payments ecosystem which has resulted in various forms of cybercrimes in Nigeria. Since money is now online and in cyberspace, it is only natural that it will attract the attention of criminals.
“The criminal justice process in Nigeria in relation to electronic frauds is evolving with relevant laws still being enacted and law enforcement agencies and judicial system still in the process of understanding the technicalities of the issue”.
She said that cyber security is becoming so complicated that one could argue that complexity is one of the country’s biggest security challenges.
Smith added that the evolving trends of mobility, social media, cloud-computing and advanced targeted attacks are driving this complexity.
She harped on the “Importance of continuous collaboration between all parties in the ecosystem as e-frauds encompass all parties not just the financial institutions”.
The current challenges in prosecution of electronic fraud cases, she said, include “Lack of digital evidence due mostly to deficiency of expertise in Digital forensics and as such not having adequate evidence to prosecute fraudsters that are apprehended and charged to court;
“Slow process of prosecution by law enforcement authorities. In addition to clearly setting out which of the law enforcement authorities is saddled with the responsibility of prosecuting e-fraud cases in view of technical know how to handle such cases
“Lack of Cybercrime law – The Senate passed the Cybercrime Bill in October 2014
“Inadequate collaboration and information sharing by parties in the e-payment ecosystem to encourage knowledge sharing amongst all members on current fraud trends to enable a proactive approach;
“Poor fraud reporting culture due to perceived reputational damage or loss of customers fear of regulators and lack of confidence in law enforcement agencies;
“Lack of centralized fraud management system – this is being currently developed by NIBSS; Insufficient background checks for Bank employees especially contract staff; lack of Identity Management System in the country – Will be partly addressed by the CBN BVN project and lack of legal Arbitration system on resolution of issues on e-frauds between banks and customers”.
To address the challenges, Smith listed some of the processes adopted by the industry to include, “The committee of Chief Internal Auditors of Banks (CCIABN) is working with E-PPAN and other industry groups to set up a central taskforce for coordination of e-fraud investigations and prosecution; Providing adequate support to the law enforcement authorities ( engaging, training etc.); Continuous customer education ( balancing act between protection & convenience e.g. device authentication) and the need for continuous improvement in risk management systems based on finding from investigation of e-fraud cases”.
Other ways include improving skills of staff on evidence gathering and digital forensic investigations; pushing for the establishment of Special courts for quick adjudication of fraud cases; pushing for greater collaboration with Telecos and setup a framework for carrying out detailed background checks on employees of all parties involved in the e-Payment ecosystem.
The World Bank has predicted that Nigeria may likely see a rise in the levels of poverty over the next two years despite a moderate economic growth forecast.
The multilateral lender noted that while non-resource-rich countries are expected to continue reducing poverty and grow faster, resource-rich countries like Nigeria may drag due to declining oil prices.
”Resource-rich countries are expected to see less progress in terms of poverty reduction,” the World Bank said in its Africa Pulse report titled ‘Improving Governance and Delivering for People in Africa’.
“Importantly, poverty in resource-rich, fragile countries (which include large countries like the Democratic Republic of Congo and Nigeria) is expected to increase by 3.6 percentage points over 2022–27,” it added.
The Nigerian government has in the past two years provided various safety nets to ease the burden of the citizens, but these, on their own, may not be enough to lift millions off the poverty line.
The reforms which were implemented some 20 months ago, though came with a plethora of gains such as allowing the economy to be market-driven rather than artificial pegging, it’s nonetheless exacerbated poverty with the numbers rising from 104 million to 129 million people in a year.
According to the World Bank, Nigeria accounts for 19 percent of the share of poverty in Sub-Saharan Africa, followed by Congo, Ethiopia and Sudan with 14 percent, 9 percent and 6 percent respectively.
But despite the growing poverty, the Washington-based lender expects Africa’s most populous nation annual GDP to increase 3.6 percent in 2025 and 3.8 percent in two years. “Economic growth is expected to remain moderate in Nigeria,” the World Bank said.
“It is expected to increase from 3.4 percent in 2024 to 3.6 percent in 2025, and slightly increase to 3.8 percent in 2026–2027.”
According to the World Bank, the gradual recovery of the Nigerian economy along the forecast horizon is driven primarily by the service sector—specifically, finance, information and communications technology services, and transportation—and, to a lesser extent, a rebound in oil production that converges to its OPEC+ quota.
The World Bank’s projection is relatively higher than the International Monetary Fund (IMF) revised forecast for the nation.
IMF cuts Nigeria’s 2025 economic growth forecast downward to 3.0 percent from the earlier projection of 3.4 percent in 2024, citing weakening oil supply and escalating global trade tensions.
The two projections are however largely lower than Nigeria’s ambitious projected annual GDP growth of 4.6 percent outlined in the 2025 budget.
According to Adetilewa Adebajo, investment banker and economist Nigeria must intensify efforts towards economic diversification, infrastructure development, and asset optimisation to stimulate economic growth and attract global investments
“Sale of oil and gas JV assets to optimise equity within the FGN capital structure and balance sheet are crucial for Nigeria’s path towards sustainable development.
“Deliberate Investment projects such as the Agro Airport development and Olokola deep sea port, in Ogun State, major infrastructure projects led by companies like Arise and Dangote, need to be replicated nationwide,” Adebajo said.
Securities and Exchange Commission (SEC) has urged Nigerians to report any suspected illegal investment schemes to the commission for proper investigation and necessary action.
This is in the light of the recent collapse of Crypto Bridge Exchange (CBEX).
The Commission issued a notice on Thursday to the investing public, warning that Ponzi investment schemes pose a significant danger to the growth of the capital market.
In its latest advisory, the Commission highlighted the growing threats and risks posed by Ponzi schemes, illegal investment operations, and unregistered digital asset platforms.
It explained that fraudulent entities and individuals continue to exploit unsuspecting investors with deceptive promises of high returns, often leveraging the allure of digital assets to create a false sense of legitimacy.
“The public is strongly advised to be wary of investment opportunities that promise guaranteed or unusually high returns with little or no risk.
“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, without undergoing the prescribed processes to obtain prior approval from the SEC.
“The SEC reiterates in this regard that, ‘If it sounds too good to be true, it likely is.’”
The Commission urged potential investors to conduct thorough due diligence before investing and to verify the registration status of the company or individual offering the investment through the SEC’s website.
The Commission explained that Section 196(3) of the Investments and Securities Act, 2025, criminalizes the promotion and operation of prohibited or unregistered schemes.
“This violation is punishable, upon conviction, by a fine of not less than ₦20 million or a prison term of 10 years, or both,” the Commission warned.
The SEC stated that it is fully committed to identifying and prosecuting offenders to the full extent of the law.
“We encourage the public to partner with the SEC to safeguard the integrity of the investment environment in Nigeria by promptly reporting suspected illegal investment schemes to the SEC,” the notice concluded.
The Nigerian federal government announced that the Electronic Money Transfer Levy (EMTL) generated $49.5 million in revenue, with fintech companies contributing $18 million.
This fund, as reported by the Federation Account Allocation Committee, is a considerable 56.80 percent increase over the $31.6 million earned during the same period in 2024.
Previously, the charge mainly affected established banking institutions. However, fintech firms have been included because they have contributed a phenomenal 2,507.94 percent growth in transaction values since 2020.
The EMTL is part of the government’s attempt to regulate the booming fintech sector, which completed transactions worth $29 billion in 2023 and $49.3 billion in 2024.
The EMTL was created by the Finance Act 2020 as an amendment to the Stamp Duty Act. It charges $0.03 (N50) for electronic transactions of $6.19 (N10,000) or more made through banks and financial institutions.
This tax seeks to capitalise on the increasing expansion of electronic payments, which will exceed $619.70 billion in total transactions by 2024.
In response to the burgeoning fintech sector, the government has increased its tax base, with annual EMTL collections expected to increase by 31.35 percent.
According to the Medium Term Fiscal Framework for 2025-2027, the federal government expects EMTL revenue to reach $142 million in 2025, up from $108 million in 2024.
However, industry experts have expressed concern about the potential impact of additional taxes on users.
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