Deposit Money Banks have been urged to be quick in adopting new technology and systems to curb fraud in the nation’s financial services industry. Technology experts, who spoke in separate interviews with our correspondent, said there was a need for banks and other financial institutions to regularly upgrade their technology facilities to block loopholes and improve systems.
With the increase in the use of mobile phones for financial transactions and online purchases, the level of fraud in the industry has risen in recent years. The Chief Executive Officer, VoguePay, Michael Simeon, said stronger and more refined technologies should be adopted by banks.
According to him, by evidence, technology has done more good than harm in the financial services industry by creating jobs and opportunities as well as improving competition. He said, “Technology cannot be said to be a bad development. It is stale technology that allows for fraud. Technology such as blockchain makes it difficult to perpetrate fraud because you cannot beat the system.
“It also has auditing, which is quite good for compliance and regulatory authorities to audit. But most of the transactions in Nigeria are still not electronic, thus making it very difficult to monitor the activities and transactions or for government to audit transactions.
“Technology is a constantly evolving thing. You have to move as it is moving. When the systems are upgraded and up-to-date, it would make it impossible to defraud people. The challenge the banks are having is that they are not flexible. It takes them a lifetime to move, probably because they spend millions of naira to adopt and install a system.”
Simeon stated that banks in the country operated a closed banking system, adding that this was another hindrance to technology growth. According to him, though banks are trying, a lot more can be done so that fraud can be totally eliminated. The Chief Executive Officer, ENovaIT, Femi Ogunmokun, stated that there was a need for banks to invest in training or recruiting professional hackers to fortify their data and systems.
According to him, electronic fraud is mostly carried out by insiders or professional hackers. Ogunmokun said it would be better to prevent an act or attempt at fraud rather than rectify it. He added that awareness should also be carried out for bank customers to enlighten them on the risks associated with divulging sensitive bank information, such as card numbers, personal identification number and card verification value.
Ogunmokun said, “The way hacking works is that when you try to guess someone’s details, after a number of attempts without success, a notification is sent to the affected parties, and the perpetrator can be traced.
“What most hackers do now is to create fake pages and sites, look for how to pull traffic to the site, and then demand your bank details. People that are unfortunate to fall for it will have all their money stolen immediately. Or better still, the details can be kept, and then the money will be stolen when all guards have been let down.” He added that the Nigeria Internet Registration Association as well as regulatory financial institutions had a role to play in verifying and monitoring websites to detect fake and unregistered ones.
According to him, security firewalls such as multiple verification mechanisms for bank owners when divulging bank details can also be created to prevent fraud.