How BVN, banks’ collaboration reduce e-fraud value by 63%

The challenging operating environment notwithstanding, the use of e-channel platforms –Internet banking, Mobile banking, ATM, POS, Web, among others, has continued to experience significant growth.

According to 2015 annual fraud report of the Nigeria Inter-Bank Settlement System (NIBSS), transaction volume and value grew by 43.36 percent and 11.57 percent respectively compared to 2014.

Consequently, e-fraud rate in the Nigerian banking and payment system, in terms of value, reduced by 63 percent in 2015.

This is due, in part, to the introduction of Bank Verification Number (BVN) and improved collaboration among banks via the fraud desks.

The BVN is an initiative of the CBN and the Bankers’ Committee, launched on February 14, 2014.  It is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity.

The total BVN account enrolment as at May 2016 stood at 35 million, according to the data from the NIBSS website.

However, the total fraud volume increased significantly by 683 percent in 2015 compared to 2014.

Also, data released recently by NITDA (Nigeria Information Technology Development Agency) indicated that Nigeria experienced a total of 3,500 cyber-attacks with 70 percent success rate, and a loss of $450 million within the last one year.

Osita Nwanu, head, Systems Control & Business Continuity Management, First City Monument Bank Limited, said the sustained growth of e-transactions as depicted by the increased transaction volume and value in 2015, along with the rapidly evolving nature of technology advancements within the e-channel ecosystem, continues to attract cybercriminals who continuously develop new schemes to perpetrate e-fraud.

Because of the risk inherent in the e-channel space, many organisations have attempted to implement certain comprehensive strategies for detecting and preventing e-fraud.

Such strategies include fraud policies, fraud risk assessment, fraud awareness and training, monitoring, penetration testing and collaboration.

According to him, increased revenue, optimised costs, innovations, regulation, convenience and simplicity, are the major factors driving the massive adoption of e-channel platforms in Nigeria.

Furthermore, the usage of these platforms has created opportunities for cyber thieves who continuously devise new and sophisticated schemes to perpetrate fraud.

“E-fraud will continue to grow and combating it requires effective fraud strategies, collaboration and cooperation of many organisations in Nigeria including government agencies and other countries. If otherwise, cybercriminals would be getting richer from the hard work of others due to lack of united front on the part of everyone.

HOPE MOSES-ASHIKE