A professor of Business Management at the Ladoke Akintola University of Technology, Prof. Abiola Idowu and immediate past Head of Department of Management and Accounting has suggested ways of reducing the upsurge in E-banking fraud in Nigeria.
Prof. Idowu made this known during the 51st Inaugural Lecture of Ladoke Akintola University of Technology (LAUTECH), Ogbomoso , where she spoke on the topic; Digital Revolution and E-banking Fraud in Nigeria: Perspectives and Contours of Management Control Function.
The Don opined that the National Assembly should propose relevant bills such as Cyber security and information Protection Bill and Electronic Transactions Protection Bill that can eliminate or reduce electronic frauds to the barest minimum.
According to Prof. Idowu, the Central Bank of Nigeria (CBN) should issue operative guideline and if is in use, it should be reviewed to regulate e-banking services in such a way that suspicious transactions can be reported to its financial intelligence unit without delay.
She added that the banks should be mandated to deploy advanced tools and technology which can adequately protect the customers against falling prey to fraudsters considering the over-reliance of banks on telecom service providers for its basic services.
The Inaugural Lecturer called for the urgent provision of automated analysis tools that can identify and report fraud attempts in a timely manner. She also called for the deployment of deep learning by the Management of banks.
In her words,” Deep Learning is a new approach to machine learning and artificial intelligence which is good at identifying complex patterns and characteristics of cybercrime and online fraud.
”Prof. Abiola Idowu stated that “there is an urgent need to review the internal audit functions of banks to include fraud risk analysis and management, while the internal control mechanism should be strengthened through adequate investment in training of staff in cyber security, online audit fraud detection and management.
“There should be regular rotation of bank employees to frustrate collaborative fraud. The regulatory institutions and banks should organize workshops, seminars and public lectures for-bank customers on how to escape various e-banking frauds. The banking industry should review the existing BVN framework with the introduction of BVN watch list in the framework.”
Prof. Idowu noted that digital technologies and adoption of e-payment platforms as a convenient means of payment have led to the upsurge in the occurrence of e-fraud and cyber-attacks in Nigerian banking Industry.
She stressed the need to educate bank customers on what to do and what not to do in order to protect their savings and investment.
Prof. Idowu explained that the negative effects of digital technology have taken a huge dimension, such that it is difficult to have personal privacy in the digital world, while internet has become a platform for malevolent forces to carry out their financial crimes.
According to Prof. Idowu, “the financial industry is the most regulated sector of any economy. Despite this, fraudulent activities have been on the increase within the electronic payment system. She hinted that a research work carried out in 2009 on fraud and its management in Nigerian commercial banks, identified the major factors responsible for the high rate of fraudulent practices in the banking industry to include; weak internal control system, the adoption and extensive growth in computer technology, globalization, poor and weak financial management practices, poor regulatory framework and inappropriate societal attitude.”
The Lecturer further explained that Idowu and Adedokun in 2013 carried out a study on the evaluation of the effect on monitoring and control activities on fraud detection in selected Nigerian commercial banks and discovered that most of the electronic bank fraud take place during weekends and public holidays; to allow ample time for the money to be hived out of the bank to designated account in far-away location where the account is domiciled.
She said in some instances, withdrawals are made in the night using ATM when owners of such account will be fast asleep in order not to see the debit alert immediately.
Idowu corroborated her submission with report of the Nigeria Inter-Bank Settlement System Plc (NIBSS), which revealed that in the first nine months of 2020, fraudsters attempted 46, 126 attacks, and they were successful on 41,979 occasions, meaning 91 percent of the time.
She added that the NIBSS also revealed that in the first nine months of 2020, over N5.2 billion was lost as a result of fraud in the banking sector which was the highest in over 4 years.
Prof. Idowu, therefore called on relevant stakeholders to take urgent steps at reducing the e-banking fraud to the barest minimum in Nigeria.