How banking industry can check e-fraud

The Committee of e-Banking Industry Heads (CeBIH) has identified strategies, which it believes the Central Bank of Nigeria (CBN) and Deposit Money Banks (DMBs) can utilise in checking electronic fraud (e-Fraud). CeBIH Chairman, Mr. Tunde Kuponiyi, disclosed this in a paper published in the Nigeria electronic Fraud Forum (NeFF) 2014 annual report, entitled, “e-Fraud: Fighting the battle, winning the war”.

In the report which was posted on the Central Bank of Nigeria’s (CBN) website on Tuesday, Kuponiyi noted that the advent of the internet, the mode and channels for facilitating payments have evolved over the years with the development of a wide range of electronic payment systems.

He, however, stated that although the deployment of electronic payments systems has significantly reduced fraud and other financial crimes such as money laundering and terrorism financing globally, it has also resulted in fraudsters becoming more creative in their efforts to evade arrest.

He said, “The same technology that makes commerce more efficient and profitable is at the same time systemically creating avenues for perpetuating fraud which culminates in various degrees of losses. In fact, the fissure in electronic payment is so significant that organized crime has been built around eFraud.”

According to the CeBIH boss, the key challenge for financial institutions and online businesses is how to balance financial risk with the costs of implementing measures against e-fraud without incurring the wrath of legitimate customers. For the industry to effectively tackle the problem, Kuponiyi recommended that financial institutions, processors and businesses that accept card payments should ensure compliance with the Payment Card Industry Data Security Standard (PCI-DSS). He said, “Given that electronic payment space is predominantly carried out using payment cards, it is imperative that compliance with the PCI DSS standard becomes important for businesses of every size.

Interestingly, PCI DSS compliance is now more cost effective and a lot easier to achieve as players can now deal with multiple vendor technology.”He also proposed that electronic payment providers should regularly deploy technology solutions that will continually keep the activities of fraudster at bay.

“Fraud monitoring tools to detect suspicious transactions and behavior should be made mandatory”, he added. In addition, he called for a review of legal framework to effectively allow the criminalization and prosecution of electronic payment related fraud.

More significantly, he argued that the CBN needs to develop a wellarticulated action plan for the prevention and management of electronic payment fraud in the country. According to him, “The plan should focus on setting up electronic payment bureau and given the following mandate: Develop a framework on how insurance cover can be provided for all