The Central Bank of Nigeria wants banks to automate transaction monitoring as a measure to curb the growth of fraud in the country.
This is part of the apex bank’s new ‘Consumer Protection Regulations’ draft released recently. To protect customers’ assets against fraud, the CBN is set to ask banks to “Test product suitability with consumers and make necessary modifications to reduce the incidence of fraud or transaction errors.
“Implement the following measures across transaction channels: Multi-variant customer identification and multifactor authentication mechanisms for transactions consummated. Automated transaction monitoring, alert functions, and behavioural monitoring to detect and prevent fraud. Sensitise customers on fraud threats or scams.”
The CBN will also ask banks to sensitise customers on fraud threats or scams while stating and periodically communicating procedures for reporting suspicious, unauthorised, fraud, lost or stolen payment instruments and/or authentication information to consumers.
It will further task banks to provide “secure and simple user interfaces for digital financial services that will minimise the risk of mistakes or double transactions.”
Fraud cases have been on the rise in recent years. In the first six months of 2023, 24,232 fraud cases involving N12.33 billion were recorded in Nigeria, according to a report by FITC. 110 bank top executives and junior staff members have been sacked for fraud-related cases totalling N82 billion in the past two years.
In a recent document titled ‘Financial Inclusion and Cybersecurity in the Digital Age,’ Kristalina Georgieva, managing director at the International Monetary Fund, declared that the world’s growing reliance on digital financial services is fueling an increase in cyber-attacks.
“COVID-19 accelerates our digital advancements, and opportunities are multiplying at an even faster pace. But so are the risks. And if we want to harness the great power of technology to lift people up, we need to deal effectively with the threats that can bring technology down and harm lives and livelihoods,” Georgieva said.
Victor Irechukwu, Head of Engineering at OnePipe, recently disclosed that the rise in fraud cases would affect the country’s cashless aspirations.
“As much as the country and even individuals would like to go cashless, these bad experiences leave a sour taste in the mouth, and they have continued to rain on the parade as Nigeria marches towards a cashless economy,” he said.
