Fraudsters in Nigeria are shifting focus to mobile attacks as mobile channels recorded the highest number of frauds in 2018, scoring 28.21 percent on the Fraud Interest Index (Flt), according to the country’s Inter-Bank Settlement System (NIBSS) fraud report for 2018.
“This could be an early warning sign that fraudsters are shifting focus to mobile attacks and testing the waters in different types of mobile and online banking fraud in 2019,” said Sam Okojere, director, payment system management department, Central Bank of Nigeria (CBN).
Okojere said Other Financial Institutions (OFIs), digital wallets and remittance players are prime targets for cyber criminals seeking quick monetisation of stolen credentials.
“But that does not mean we should give up on the fight. We have to galvanise efforts and resources to ensure users are who they say they are,” he said.
According to the 2018 annual report of the Nigeria electronic Fraud Forum (NeFF), mobile channel led other channels in fraud with N599 million in actual loss on 11,492 transactions.
The increase in mobile channel fraud mirrors the rise in mobile money adoption in the country.
The volume of mobile payments increased by 14.0 percent to 27.6 million in the first half of 2018, from 24.2 million in the corresponding period of 2017. Similarly, the value of mobile payments increased by 7.0 percent to N594.9 billion, from N555.8 billion in 2017, according to the CBN’s economic report for the first half of 2018.
The rise was due to increased acceptance of mobile payments as an easier alternative, the CBN said.
Fraud in mobile channel in 2018 was followed by Automated Teller Machine (ATM) with 9,471 transactions and actual loss of N497 million, according to the NeFF report.
Point of Sale (PoS) recorded actual loss of N301 million in 1,734 transactions, while 272 across counter transactions recorded actual loss of N202 million in value terms.
Overall, deposit money banks recorded a total of N2.081 billion in actual loss value on 38,852 transactions in 2018, as reported on the anti-fraud portal.
Banks lost a total of N163 million in value terms on 9,972 transactions through the web, 3,714 transactions valued at N93 million through internet banking, 14 transactions valued at N19 million through cheques, 1,996 transactions valued at N14 million through e-commerce, and 187 transactions valued at N103 million through other channels.
Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited, said banks and mobile money operators have to find ways to mitigate fraud, adding that rising incidence of fraud will discourage users.
He said for people to embrace mobile money operation, it must be efficient and safe, as absence of safety could cause people to look for alternative channels.
“They should build control measures, checks and balances and must control abuse on their platforms,” Chukwu said.
In 2017, ATM channel reported the highest fraud in both volume and actual loss value, whereas mobile channel recorded the third highest reported fraud by volume and the second highest reported fraud by actual loss value.
The report shows that a total of 848 unique individuals were beneficiaries of fraudulent transactions carried out across various electronic channels.
An analysis of the beneficiaries of the fraudulent inflows by location reveals that more fraudsters reside in Lagos, accounting for 32 percent of total; 71 percent were male and 29 percent were female.
On the other hand, a total of 17,632 individual customers were defrauded across e-payment channels in 2018. Of this number, 30 percent reside in Lagos, 61 percent were male while 39 percent were female.
Other Financial Institutions (OFIs) reported a total of 754 fraud cases in the year under review. When compared to 2017, there was 16.72 percent increase in reported fraud volume and 19.53 percent increase in actual loss value.
Also, OFIs’ attempted fraud value increased by 36.68 percent compared to 2017. They were able to salvage 15.54 percent of attempted fraud value.
To check fraud, the CBN said on Friday that NeFF intends to introduce some payment valves in the ecosystem. These include embarking on a multi-industry coordinated fraud awareness campaign, extending the concept of an anti-fraud forum to cover the West African sub-region, constituting a consumer protection plan and operationalising the Payment System Security Risk Management Centre (PSSRMC), which will include a dedicated police desk that will focus on payment and card crimes.
“While we work towards achieving all the afore-mentioned tasks, the security teams of financial service providers must also continually rethink their strategy, from automating their security hygiene measures to replacing isolated security devices with an integrated security architecture that can seamlessly stem the tide of fraud attacks,” Okojere said at the general meeting of NeFF in Lagos.
“By this, it is my hope that we would achieve major strides in the right direction towards making fraud prevention easier, faster and affordable for everyone,” he said.
HOPE MOSES-ASHIKE
