New-age technology, especially the internet has come with many benefits, ranging from easy communication to simplified execution of tasks and more importantly, the ease of financial transactions. But with some minor fraud troubles come ease to utilise such loopholes.
As Nigeria pushes for financial inclusion and embraces electronic transactions, it is crucial to keep an eye on online fraud, which threatens the tech efficacy of digital banking.
According to the Nigeria Inter-Bank Settlement System Plc (NIBSS), fraudsters have attempted 46,126 attacks in the first nine months of 2020, and they have succeeded 41,979 of the times.
The numbers above show that mobile phone usage, internet penetration, and agency banking activity are increasing, but the country’s financial fraud rate also peaked.
The following five charts illustrate the situation.
Data from the Nigeria Inter-Bank Settlement System Plc (NIBSS) shows that in the first nine months of 2020, over N5.2 billion was lost to fraud in the banking sector. Despite only being nine months, this is the highest amount lost in over four years.
NIBSS contends that this was attributable to a pandemic that caused people, corporations, and governments to take their businesses and connections online in 2020.
Fraudulent methods identified by the NIBSS include social engineering, no two-factor authentication, PIN compromise, card/phone theft, fake assistance, among others. One of the most common was social engineering, which involved manipulating people into giving out confidential information and bank account numbers. It also accounted for 56 per cent of all fraud attempts.
Most commonly, people receive texts or emails from fraudsters posing as bank personnel.
The next biggest targets were those without two-factor authentication, at 19 per cent. Others are card theft (6%), phone theft (6%), fake assistance (5%), pin compromise (3%), robbery (1%) and others.
A lot of the fraud perpetrated by these fraudsters were committed through the Internet, by mobile transactions, and ATMs.
Several fraudulent activities were carried out in Nigeria in 2019 through the web (51 per cent), mobile transactions (35 per cent) and ATMs (20 per cent). In 2020, many Nigerians were defrauded through the web (47 per cent), mobile transactions (19 per cent) and ATMs (9 per cent).
Nigeria isn’t the only country in the world hit by fraud, but it seems to be the worst by a wide margin. NIBSS data indicated that Nigeria recorded a total fraud value of N3.3 billion in Q3′ 2020 compared to 499 million in the same period in 2019.
The NIBSS reported a total of 48,767 victims of fraud throughout the period. According to the report, most fraud victims were over 40 years of age, with 33.97 per cent making up the total number of victims.
