Connect with us

E-Financial

Nigerian Banks Detect 46% eFraud via Customer Complaints

Published

on

(L-r): Osioke Ojior, chief risk officer, Nigeria Inter-Bank Settlement System (NIBSS), Justice Atinuke Ipaye of the High Court of Lagos, and representative of the CBN at E-PPAN 5th e-fraud conference in Lagos.
Kindly share this post

 

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.


Kindly share this post

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

E-Financial

NDIC Insures 99 Percent of Bank Customers

Published

on

Kindly share this post

Nigeria Deposit Insurance Corporation (NDIC) has reaffirmed its commitment to protecting depositors and sustaining confidence in the nation’s banking system, declaring that its insurance framework currently safeguards about 99 per cent of customers across Nigerian banks.

NDIC Insures 99 Percent of Bank Customers

Speaking during the NDIC Special Day at the 37th Enugu International Trade Fair, Thompson Oludare, managing director and chief executive, highlighted the Corporation’s role as a critical stabiliser in the financial sector, particularly in times of economic uncertainty.

Addressing participants on the theme, “Empowering MSMEs for global competitiveness”, Oludare said the NDIC remains a dependable backbone for small businesses by protecting their funds against bank failures.

He disclosed that the Corporation reviewed and increased its insurance coverage in 2024 in line with prevailing economic realities. Under the revised structure, depositors in Deposit Money Banks (DMBs), Mobile Money Operators, and Non-Interest Banks are insured up to ₦5,000,000, while those in Microfinance Banks and Primary Mortgage Institutions are covered up to ₦2,000,000.

Explaining the operational mechanism behind depositor protection, Oludare noted that the NDIC does not depend on government funding to reimburse customers of failed banks.

Rather, it draws from the Deposit Insurance Fund (DIF), which is financed through premiums contributed by licensed financial institutions.

He described the process as efficient and sustainable, enabling the Corporation to meet its obligations promptly without placing pressure on public finances.

Highlighting recent technological advancements, the NDIC boss revealed that the use of the Bank Verification Number (BVN) has significantly improved the speed of payments to affected depositors.

According to him, the BVN system allows the Corporation to trace alternative bank accounts of customers and process reimbursements within days of a bank’s closure, eliminating the delays previously associated with manual claims.

For depositors with balances above the insured limits, Oludare reassured that recovery efforts remain ongoing through liquidation processes.

“This is a continuous process,” he stated. “Additional dividend payments are made in tranches as more funds are recovered. We have demonstrated this successfully with the liquidation of Union Homes, Aso Savings and Loans, and the more recent Heritage Bank Limited, where multiple tranches of dividends have already been disbursed.”

He also cautioned Nigerians against falling victim to fraudulent financial schemes, popularly known as “wonder banks”, urging them to verify the credibility of financial institutions before investing.

On his part, Nnanyelugo Onyemelukwe, president of the Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), described the Corporation as a dependable safeguard for depositors.

According to him, the NDIC remains “a beacon of hope for depositors”, providing a “great confidence backup” in situations where banks fail due to mismanagement or distress.

Onyemelukwe also called for stronger regulatory oversight by the Central Bank of Nigeria (CBN) to further reduce the risk of bank failures and sustain public trust in the financial system.

 


Kindly share this post
Continue Reading

E-Financial

CBN Bars Chronic Loan Defaulters from Accessing Loans

Published

on

Kindly share this post

Central Bank of Nigeria (CBN) has officially restricted banking services for “chronic defaulters” and large-ticket obligors with non-performing loans.

CBN Bars Chronic Loan Defaulters from Accessing Loans

In a sweeping move to enforce credit discipline and safeguard the nation’s financial system, the apex bank issued a policy statement on Wednesday following remarks by Olayemi Cardoso, governor, CBN, at the 4th Annual IMF/AFRITAC West 2 High-Level Executive Forum in Abuja.

The Governor made it clear that the era of regulatory forbearance for delinquent borrowers is over.

He emphasised that the bank is shifting toward a more aggressive stance on corporate governance to ensure that the N4.61tn in new capital recently attracted by the banking sector is protected from systemic abuse.

“Our stance on corporate governance is unequivocal: zero tolerance for violations. By ending years of regulatory forbearance, we have reinforced accountability, tightened supervision, and elevated compliance standards across the sector,” the Governor stated.

The new directive specifically targets “large-ticket obligors”, individuals or entities with significant outstanding debts classified as non-performing in the Credit Risk Management System. Under the new rules, these defaulters will be barred from accessing not only fresh credit but also essential contingent liabilities and trade instruments.

“We have implemented a restriction of banking services to non-performing large-ticket obligors. This decisive step underscores our commitment to credit discipline, financial integrity, and accountability,” the statement read.

According to the CBN, the move is designed to instil a “culture of repayment” that has historically been lacking among high-profile borrowers. By cutting off access to instruments such as letters of credit and performance bonds, the regulator aims to prevent “credit jumping”, a practice where defaulters migrate between banks to accumulate more debt.

“By curbing access to banking services for chronic defaulters, we are reinforcing the culture of repayment, protecting depositors, and safeguarding the stability of the financial system,” the apex bank added.

Beyond the crackdown on debtors, Cardoso reaffirmed that the CBN remains firmly committed to orthodox monetary policy. This approach prioritises price stability and the use of traditional tools to anchor inflation expectations, moving away from unconventional interventions to restore confidence in the naira.

“The CBN remains firmly anchored in orthodox monetary policy, focused on restoring price stability, strengthening policy credibility, and anchoring expectations through discipline and consistency,” the statement concluded.

For years, the Nigerian banking sector has struggled with “chronic defaulters”, wealthy individuals or massive corporations that borrow billions and fail to repay.

These are often referred to as “large-ticket obligors”. When these loans go bad, they threaten the liquidity of banks and the safety of ordinary citizens’ deposits.

Under the leadership of Cardoso, the CBN is pivoting toward “Orthodox Monetary Policy”. This means moving away from the era of massive development interventions and direct lending to sectors like agriculture and focusing instead on its core mandate: price stability and financial system regulation.


Kindly share this post
Continue Reading

E-Financial

Breaking…..Kuda Lays Off Many Employees in Broad Restructuring

Published

on

Kindly share this post

Kuda Technologies Limited, a Nigerian digital bank backed by global investors, has laid off employees across several departments as it restructures its operations, even as the company says its financial position has been improving.

Kuda Lays Off Many Employees in Broad Restructuring

The job cuts affected multiple departments.

The firm however said that the decision to cut job is not driven by financial pressure, but part of the natural evolution of a company at our stage, aligning with industry benchmarks.

On Wednesday, March 25, staff were invited to a company-wide video call with senior executives.

Before the meeting ended, hundreds of employees were informed that their roles had been terminated as part of a broader restructuring.

The cuts affected multiple teams, including marketing, where 19 of the unit’s 40 employees were impacted, two affected workers said.

In a statement emailed on Friday, a Kuda spokesperson said the move followed a strategic review of the business and was meant to prepare the company for its next phase of growth.

“Kuda is evolving how the organisation is structured to support the next phase of our growth and scale,” the spokesperson said. The company added that the decision was not driven by financial pressure or employee performance but by changes in operational priorities.

Employees received notices explaining that the company had reviewed its future direction and industry benchmarks before deciding to reorganise some departments.

The process, according to the company, was aimed at aligning its workforce with long-term goals.

Still, the way the layoffs were communicated unsettled some staff.

An unusual company-wide meeting was scheduled earlier in the day, and several employees initially struggled to access the call link, according to a former employee. When the meeting began, senior leaders confirmed the job cuts.

Some workers also questioned the timing of the restructuring, pointing to recent hiring decisions, including senior-level recruits.

Kuda said it is offering affected employees severance packages that vary depending on role and length of service.

According to a person familiar with the terms, some staff may receive up to seven months of pay. The company has also proposed enhanced exit packages tied to settlement agreements.

The layoffs come at a time when many African fintech companies are shifting focus from rapid expansion to profitability and operational efficiency after years of venture-backed growth.

Kuda, which has about seven million registered customers, has been narrowing its losses in recent years. The company reduced its losses to about $5.83 million in 2024 from $35.11 million a year earlier, helped by stronger performance from its Nigerian business and lower operating expenses.

Its Nigerian unit nearly doubled revenue in local currency to about N21.2 billion during the period.

The fintech has also reported strong growth in transaction activity. In its last public update, Kuda said it had processed more than 300 million transactions worth roughly N14.3 trillion and issued N16.4 billion in overdrafts, up 43 percent from the previous quarter.

Babs Ogundeyi, chief executive officer said the company’s net margin has ranged between three percent and seven percent per month. If that pace continues through the year, the digital bank could process more transactions in 2025 than it did in its first five years combined.

Kuda last raised external funding in 2024, securing $20 million in equity at a valuation of about $500 million. The fundraising came after the company recorded nearly $45 million in losses over the two years leading up to the round.

The restructuring suggests the startup is now adjusting its cost base and internal structure as competition intensifies in Nigeria’s fast-growing digital banking market and investors push fintech firms to show clearer paths to sustainable growth.

 

 


Kindly share this post
Continue Reading

Trending