CCIBN strategize on e-payment fraud prevention

Chief Inspector of Banks strategize on e-payment fraud prevention

Purchase fraud, identity theft, phishing, carding and skimming have been identified by experts as potential threats to the successful implementation of the cashless economy initiative of the Central Bank of Nigeria (CBN), which commenced in pilot stage in Lagos State in January 2012. Through the cashless initiative which promotes the use of e-payment channels such as Automated Teller Machines, Point of Sale (PoS) Terminals, Online Web Portals, Mobile Money  and Electronic Funds Transfers, among others, the CBN intends to reduce the dominance of cash-based transactions by enhancing electronic payments.

To mitigate risks associated with e-payment channels thereby strengthening the CBN cashless economy initiative, the Committee of Chief Inspectors of Banks in Nigeria (CCIBN), at its 4th Annual Retreat/Conference and Annual General Meeting of Members, focused on the prevention of e-payment fraud across the country’s nascent cashless economy. The retreat that held from March 22 - 24 was intended to adequately acquaint participants with the types of e-payment frauds as well as strategies to prevent them.

In the welcome address delivered on behalf of Tunde Lemo, Deputy Governor Operations, Central Bank of Nigeria, Gaius Emokpae, Director of Banking and Payment Systems lauded CCIBN, saying its annual retreats have become a veritable platform for strengthening relationships in the banking industry. According to him, the CCIBN retreats have become a fertile ground for exchange of ideas and enlightenment of participants on new developments in the financial services industry.

“The theme for this year’s retreat which is ‘E-payment: Fraud Prevention, Strategies and Implementation’, is very appropriate and the timing cannot be better than now. The CCIBN once again have provided the banking industry with a robust platform for discussing issues on technological development that would influence the financial system positively. This retreat is therefore very auspicious because e-payment systems which have become the vogue in Nigeria are prone to fraud and fraudsters will do anything to thwart the efforts of industry players,” he said.

He disclosed further that e-payment frauds occur largely due to the use of Internet services or software with Internet access to defraud victims using unsecured payment systems or identity theft and impersonation. Means of e-payment fraud ranging from purchase fraud, identity theft, phishing, pharming, carding and skimming, among others, can however be mitigated through adherence to data confidentiality, consumer protection, systems and data integrity, authentication and non-repudiation, among other principles. In this regard, the Central Bank of Nigeria has issued guidelines on electronic banking, transactions switching, stored value card and prepaid card operations as well as mobile money, aimed at increasing public confidence in the e-payment system.  

Boye Ogunmolade, the Chairman of CCIBN said the cashless economy initiative is still relatively new in Nigeria, making it imperative for Chief Inspectors of Banks to equip themselves adequately on how to prevent e-payment frauds, as the cashless economy initiative gains momentum.

The CCIBN is primarily saddled with the responsibility of promoting inter-bank cooperation and sustaining high ethical standards in the banking industry.