The Nigerian banking industry is reeling from the staggering revelation that it lost a jaw-dropping N12.2 billion to electronic payment fraud in the first half of 2023, according to a report unveiled by Interswitch.
This alarming figure underscores the persistent security challenges that financial institutions are grappling with, even as they strive to enhance their digital payment infrastructure.
Speaking at the Techconnect 3.0 event in Abuja, Suzan Fasipe, the Head of Retail Payments at Interswitch, provided crucial insights into the dire state of electronic payment fraud.
She disclosed that in 2022, the industry recorded N35 billion in fraud attempts, resulting in an actual loss of N14.3 billion.
“58 percent of these fraud losses in 2022 were orchestrated through mobile, web, and POS channels, amounting to a staggering N8.3 billion,” Fasipe stated. Furthermore, she revealed that a concerning 37 percent of banks had fallen victim to various forms of ransomware attacks between 2021 and the present.
The report’s most unsettling revelation is that a staggering 93 percent of banking-related fraud occurred through online transactions. Fasipe also highlighted a particularly insidious form of fraud, known as chargeback fraud, where consumers manipulate online purchases to their advantage, sometimes going undetected by banks for up to six months.
“Corporate fraud, largely resulting from weak internal controls, accounted for a staggering 96.2 percent of electronic payment fraud,” Fasipe added.
In 2021, she noted, four banks suffered losses of N1.77 billion due to fraudulent activities involving both employees and consumers.
Fasipe, however, did not merely present grim statistics. She offered practical solutions to fortify existing safeguards against fraud, protect sensitive consumer data, and navigate emerging industry trends.
The Techconnect 3.0 event, where this alarming report was unveiled, served as a platform for robust discussions on financial inclusion strategies and the crucial role of regulators in advancing digital financial inclusion.
Interswitch took the opportunity to appreciate its loyal customers and reinforce its commitment to nurturing enduring partnerships within the digital payment ecosystem.
Thomas Eze, Interswitch’s Regional Head of Northern Business, stressed the urgent need to unlock the full potential of mobile payments for a more inclusive economy.
He highlighted the profound impact of digital solutions in bridging the financial services divide, particularly in underserved areas, ultimately integrating marginalized communities into the formal economy and boosting economic growth.
Eze praised Interswitch’s innovative products, including Verve and Quickteller, as champions of financial inclusion and prosperity. “Our mission is clear – to democratize access to financial services, and our dedication to this mission remains steadfast,” he declared.
However, Eze emphasized the importance of collaboration among stakeholders, underlining the potential of a financially inclusive economy through mobile payments.
Support Investigative Journalism and Mentorship
Courageous Journalism of Truth,Transparency and Development is in the DNA of Prime Business Africa; By donating as little as N1000 or $1 today, you are helping to keep credible journalism and life-changing information free for all.