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Fraud Trends Every CFO Should Know

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PwC’s Global Economic Crime and Fraud Survey 2022 revealed that 46% of organisations have experienced fraud, corruption, or other economic crimes in the last 24 months. Ryan Mer, CEO of eftsure Africa, a Know Your Payee™ (KYP) platform provider, gives a rundown of what to look out for.

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  1. Fraud protection is no longer optional

It’s hard to believe today, but just a few years ago, even large organisations didn’t have payment fraud protection in place. One of our clients, a listed company, had an ongoing issue with payment fraud totalling over R3 million in losses in the year prior to adopting eftsure. They haven’t lost a cent to payment fraud since.

Businesses are taking the threat of payment fraud a lot more seriously than they did even two years ago. They’re acknowledging that the payment fraud risk is there and that it’s ubiquitous – not only large corporations and banks are being targeted anymore. They know they have to be protected in some way or another.

  1. It’s easier to hack people than to hack machines

Business email compromise (BEC) is a massive problem, even with protection in place. As threat protection becomes more sophisticated, fraudsters are targeting people to circumvent these digital security measures. There are numerous examples of bad actors manipulating various levels of staff. Although it may be tempting to believe only gullible individuals fall for scams, but criminals are often professional, persuasive and are well-trained in using human weakness, as well as individual and company information to their advantage.

Here’s a likely scenario: A client writes an online review of your company. A fraudster sees this and now knows this person or company is your client and that you would expect emails from them. They create a similar-looking fake email address, paste the client’s logo in their email, attach a malicious document, and send it to your company asking for clarification on the ‘attached invoice’. It takes one person on your team to open that attachment without double checking the sender’s details, and your company is compromised. This happens so easily when financial teams are under tremendous time pressure.

Email security really does help, but personnel training is crucial. Otherwise, it’s like having the best security at your house, from beams to alarms to fencing, and letting someone through the gate without checking their credentials.

  1. Manual processes are dangerous

The surprising result of increased digital fraud and BEC is that many companies opt to solve this problem by introducing more manual processes. They’re adding another person as a point of contact or another manager to oversee crucial checks. The problem is that it’s still a manual process, reliant on a person that can be manipulated, whether unwittingly or not. It’s a case of rearranging the deck chairs on the Titanic. Digital threats must instead be fought with digital solutions.

Another common mistake is to automate some processes but keep certain steps in that process manual. And ‘manual’ doesn’t necessarily mean physical documents but can involve adding extra steps to a process that could easily be automated. Onboarding new suppliers or clients is a great example: Many businesses have a platform for this, but then request certain documents via email. That’s an invitation for an interception, impersonation or malicious attachment. Or they’ll take data from the platform and manually perform processes and procedures on it, adding in a human element and the potential for mistakes. That’s not only counter-productive from a security perspective, but also a business perspective.

Luckily, we’re seeing the pendulum start to swing in the other direction. CFOs and CEOs, the executives responsible for processes, controls, operations and systems in the organisation, are starting to pay more attention to digitisation and automation. There’s a better understanding of these risks and benefits in general. After all, there is a lot of responsibility that sits on the shoulders of those responsible for outgoing payments in an organisation.

Onboarding, for example, is one of the first experiences someone will have with your company and should be as seamless and simple as possible. By using a platform that can digitise and automate the process, you can speed up the onboarding journey and collect all documents upfront, saving time for all parties involved. A digitised and controlled internal approval process that is automatically part of internal procedures increases business efficiencies and reduces wastage of productive time and energy that should be used to further the company, as manual labour is greatly reduced.

  1. Don’t just upgrade; integrate

The next step is to not only automate, but to integrate. Though our solution can be used as a standalone system, we’re seeing more clients integrating it into their existing systems.

A Software as a Service (SaaS) provider like eftsure can help enhance processes and limit payment fraud risks by providing an integrated onboarding, verified master data management and payment screening solution that cross-references the payments an organisation is about to release with a database of verified bank account details. This can be integrated into anything from ERP and accounting systems to sales and customer relationship management systems. The platform alerts you to any potentially compromised  payment details, at point of payment, allowing you to deal with the problem before the flow of funds has occurred.

The CFOs who are ahead of the digitisation curve, or further along in the process, are now looking for more integrated solutions. This cuts down on the number of steps in each process, and the time spent on each step – improving security while improving the bottom line. Even if they’re making these decisions for the sake of efficiency rather than security, it’s still a win on both fronts and at the end of the day, which stakeholder, with that huge responsibility of releasing payments on behalf of a company wouldn’t want peace of mind before releasing payments?


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

Telecom

GSMA Report Highlights Telecom Sector’s Contribution to Nigeria’s GDP

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A recent Groupe Spécial Mobile Association (GSMA) digital economy report has cast a spotlight on the significant contributions of Nigeria’s telecom sector to the nation’s GDP, highlighting its crucial role in driving economic growth and development.

Released amidst growing interest in the Nigerian telecom landscape, the report provides a comprehensive analysis of the sector’s impact on the country’s economic metrics. Key findings reveal that in 2023 alone, the telecom sector directly contributed 8% to Nigeria’s total GDP. However, when factoring in the wider ICT industries’ value-added contributions, this figure surged to an impressive 13.5%.

Beyond mere numbers, the report delves into the intricacies of the telecom sector’s influence on various economic sectors. It elucidates how the mobile industry’s cumulative contribution to Nigeria’s GDP reached an estimated 20 trillion NGN in 2023, accompanied by substantial tax revenue contributions totalling 2.8 trillion NGN. Such figures further highlight the sector’s role in driving fiscal revenues and national economic stability.

Moreover, the report sheds light on the transformative potential of the telecom sector in enabling digitalisation across key industries. Projections indicate that by 2028, sectors such as agriculture, manufacturing, transport, trade, and government are poised to witness a remarkable GDP increase of approximately 2 percentage points.

This surge is expected to generate an additional NGN 1.6 trillion in tax revenue, marking a significant milestone in Nigeria’s quest for economic diversification and resilience.

“The telecommunications sector is the backbone of the digital economy. We have a strong appreciation of the fact that if we are able to improve the business environment and invest in the sector, we can continue to improve the level of productivity.

A country like Nigeria has significant opportunities to contribute to the world, but this is impossible without diversifying the economy”. Dr. Bosun Tijani, Minister of Communications, Innovation and Digital Economy added.

The report also highlights the vital role of 5G networks in enhancing operational efficiency across sectors through real-time data transmission and remote monitoring.

It spotlights the immense potential of digitalisation in sectors like manufacturing and trade, with the capacity to add trillions in industry value and generate substantial employment opportunities and tax revenues.

Despite these promising revelations, the report also acknowledges the challenges faced by the telecom sector, particularly its capital-intensive nature.

The report’s findings beckon a clarion call for concerted efforts to leverage the telecom sector’s potential as a catalyst for economic advancement. With the right policies and investments, Nigeria stands poised to harness the full spectrum of opportunities offered by its vibrant telecom landscape, driving inclusive growth and prosperity for all.


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Tariff Increase Advocacy Gains Momentum as GSMA Report Reveals Industry Insights

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While the advocacy for tariff increase remains under deliberations, revelations in the latest Groupe Spécial Mobile Association (GSMA) digital economy report have watered the ground for an increased tariff increase advocacy. The report, offering a deep dive into the sector’s dynamics, provides compelling arguments for adjusting tariffs to ensure sustainability and growth.

L-R: Juergen Peschel, Chief Executive Officer, 9Mobile; Dr. Bosun Tijani, Honourable Minister of Communications, Innovation, & Digital Economy; Dr. Aminu Maida, Executive Vice Chairman, Nigerian Communications Commission; Gbenga Adebayo, Association of Licensed Telecommunications Operators of Nigeria (ALTON); Bella Disu, Executive Vice Chairperson, Globacom; Karl Toriola, Chief Executive Officer, MTN; Angela Wamola, Head of Sub-Saharan Africa, GSM Association (GSMA); Ibrahim Dikko, Chief Executive Officer, Backbone Connectivity Networks Nig. Ltd.; at the GSMA Nigeria Digital Economy Report launch in Abuja on May 9 2024.

Highlighted in the report is the telecom sector’s significant contribution to Nigeria’s GDP. In 2023 alone, it accounted for 8% of the nation’s total GDP, a figure that swelled to 13.5% when considering the broader ICT ecosystem. The mobile industry’s overall contribution to GDP was estimated at a staggering 20 trillion NGN, with substantial tax revenues of 2.8 trillion NGN.

The sector’s potential to drive digitalisation across various domains is of paramount importance. The report projects a significant boost in GDP across sectors like agriculture, manufacturing, transport, trade, and government, translating into nearly 2 million jobs and an additional NGN 1.6 trillion in tax revenues by 2028.

The promise of 5G networks is poised to revolutionise operations, particularly in critical sectors like oil and mining, with real-time data transmission and remote monitoring enhancing efficiency. Digitalisation, especially in manufacturing and trade, holds immense potential for value addition and job creation, promising billions in additional tax revenues.

Despite Nigeria’s noteworthy internet usage figures, with 29% of the population regularly online, the sector faces challenges. The country boasts the lowest-cost data baskets in Africa, yet maintaining competitive mobile data network speeds remains essential. With an average speed of 21Mbps, Nigeria’s performance is comparable to neighbouring countries, underscoring the need for sustained investments.

However, sustaining this growth requires recognizing the capital-intensive nature of the telecom sector. Operators must continually invest in network maintenance and expansion, necessitating a conducive regulatory environment that ensures fair returns on investments.

Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, commenting during the report launch, said, “We raised several issues on the state of affairs of the telecom industry, and among the challenges articulated is the return on investment, stability of the infrastructure and the need for pricing rights. As an ecosystem, tariff hike is one of the sensitive issues affecting the telecom sector and has to be addressed by all stakeholders. We need to look at the state of affairs of the industry and examine holistically. There are ongoing obligations to our end users including infrastructure security. Tariff increase is a solution to solve multiple challenges of the telecom industry.“

The GSMA report positions the ongoing tariff adjustment deliberations as a strategic move to secure the sector’s long-term viability. With Nigeria’s digital future at stake, finding a balance between affordability for consumers and sustainability for operators is paramount to ensure continued growth and innovation in the telecom landscape.

 


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The Telecoms Sector Cannot be Used Palliative for Economic Woes –Adebayo

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Gbenga Adebayo, chairman, Association of Licensed Telecom Operators of Nigeria (ALTON) has said the telecoms sector should not be a palliative to solve economic woes.

The Telecoms Sector Cannot be Used Palliative for Economic Woes –Adebayo

Gbenga Adebayo, chairman of ALTON,

He made this call during his address at the Groupe Spécial Mobile Association (GSMA) digital economy report launch which took place in Abuja.

According to Adebayo, the telecom industry faces numerous challenges that hinder its growth and development.

He emphasized the need for sustainable investment, effective regulation, and a conducive business environment to drive progress.

The GSMA digital report, launched May 9th 2024, 2024, highlights the telecom’s 8 percent contribution to Nigeria’s GDP and 13.5% when considering the broader ICT ecosystem.

The report also highlights the significant challenges plaguing the industry including investment challenges, right of way, multiple taxation, and regulation.

Adebayo highlighted the existence of over 45 associated charges and levies on operators, despite the supposed removal of right of way costs.

He said that it creates an unfavorable business environment, discouraging investment and hindering the industry’s ability to deliver quality services.

He also stressed that regulatory interference and the lack of independence for the regulator exacerbate the problem.

The price review should be a simple regulatory process.

The public debate this has gained makes it appear the industry is insensitive to people’s concern.

“While the government tries to provide incentives for the public on account of ongoing macroeconomic headwinds, the telecoms  sector should not be used as a palliative to solve the people’s problem. We must price right to sustain the industry; we must price right to have the right investment,” , Adebayo said.

He concluded that the industry must be allowed to operate sustainably, with the right investment and regulation, to deliver quality services and drive economic progress; encouraging stakeholders, including policymakers, regulators, and operators, to work together to address the challenges facing the industry, in order to drive economic growth, and fulfill its potential as a critical sector in Nigeria’s economy.

 


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