Nigeria’s financial sector is experiencing a surge in cybercrime and fraud, posing significant risks to banks, fintechs, and customers. Despite investments in cybersecurity infrastructure, the industry remains vulnerable to attacks. Tayo Ogunlade, Chief Technology Officer at Onafriq, attributes the increase in fraud to the rapid growth of the financial industry, driven by mobile phone adoption and internet penetration.
Ogunlade identifies weak nodes in the financial system, particularly in fintechs, which can compromise the entire network. He emphasizes the importance of robust Know-Your-Customer (KYC) processes, citing recent fraud cases linked to inadequate KYC measures. The Central Bank of Nigeria’s new KYC rules, including the requirement for Bank Verification Numbers (BVNs) and National Identification Numbers (NINs), aim to address this issue.
Ogunlade highlights the significant risk of insider involvement in fraud, citing a recent case where a tier-1 bank sacked 100 employees for fraud. He stresses the need for organizations to focus on internal processes, frameworks, and audits to prevent internal threats.
Ogunlade notes that public awareness of cybersecurity is improving but still inadequate, particularly outside major cities. He emphasizes the need for organizations to educate customers and implement stringent processes to prevent fraud.
To combat fraud and cybersecurity threats, Ogunlade advocates for increased collaboration among financial institutions and investments in cybersecurity infrastructure. He also stresses the importance of process-driven organizations and adherence to international standards.
The rise in fraud and cybersecurity threats in Nigeria’s financial sector is a pressing concern. While investments in cybersecurity infrastructure are essential, it is equally important to address weak links in the system, internal threats, and public awareness. Collaboration and adherence to international standards are crucial in building a secure financial ecosystem.
