Special report… How secured is your bank savings?

In from Ali Smart . . .

Increasingly, most banks in the country are becoming highly vulnerable these days to the antics of fraudsters masquerading as bankers who capitalise on the lapses in the system to perpetuate crimes

Are the banks still safe havens to keep money? Harmless as this question sounds, it elicited wide-ranging responses from a cross-section of respondents when Ripples broached the subject at the weekend.

One particularly riveting story was shared by a respondent who narrowly escaped being ‘scammed’ by wait for this: his bank!

For the avoidance of doubt and confusion, a short anecdote would suffice.

Tales of woe

Fred Adegboyega, a journalist who lives in Lagos had two weeks ago gone to his bank ATM, one of the new generation banks with a branch office at Fatai Atere Way, Matori, in Mushin axis of Lagos to make some withdrawals.

Few days later, he returned to the same bank ATM in time to cash money for a trip to Ibadan, but discovered to his chagrin that his account was in the red.

Convinced that there was a mistake somewhere, pronto, he dashed into the banking premises to lodge a complaint and was told pointblank by a staff who ran a check on his account that he actually withdrew the entire money in his account a fortnight ago.

Mouth agape, he stood transfixed as the staff beckoned on him to scrutinise his bank account details from the desktop screen, where he did confirm that he made several withdrawals few days back.

The staff told him there was nothing he could do under the circumstances.

But when he wouldn’t budge, or as he confirmed to Ripples, “I refused to fall for the dummy, the fellow asked me to fill a complaint form which l did grudgingly because I desperately needed to travel for my check-up the next day.

He told me it would take 72hours response time.”

Not completely satisfied, he left the bank a sad man.

After 72 hours had lapsed and with no word from the bank, he went to the bank, where to his consternation, he was asked to fill yet another form with assurances that he would hear from the bank within 24 hours.

Of course, 24 hours later and still no word from the bank, Furious Fred as his friends call him, who was by now terribly furious went to the bank but this time all hell was let loose.

“Heads will roll in this bank today if I don’t get back my money,” and added for emphasis: “Look, l’m a journalist in case you don’t know. In fact, get ready for serious war.”

Completely overwhelmed with emotions he yelled harangues at bank officials who tried desperately to placate even as he banged on the desks and chairs in riotous fury.

Sensing that they had a big problem in their hands, the branch manager, who he initially learnt was not around surfaced from nowhere and quickly waded in and his account was credited in a jiffy.

But not many bank customers have been that lucky like Fred. In recent times, many customers, Ripples investigation revealed, have had their bank accounts compromised one way or the other due to lapses in the banks and largely as a result of the fraud perpetrated by insiders within the confines of the bank.

Worries as bank fraud grows in epic proportions

The regularity of bank-related fraud is such that confounds many people judging by the high success rate recorded by the individuals perpetrating the fraud.

Little wonder the Nigeria Deposit Insurance Corporation (NDIC) had expressed sadness in the spate of forgeries and other related crime in the nation’s banking sub-sector in recent times.

Raising this concern recently was the Managing Director the NDIC, Umaru Ibrahim.

He spoke at the 2015 workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Ilorin, Kwara State.

According to him, the banking sector recorded a total of 10,612 fraudulent cases in 2014 as against 3,786 cases in 2013. The figure, he said, showed an increase of 183 percent.

The amount involved in 2013 was N21.80 billion as against N25.61 billion in 2014 which was a 17.5% increase with expected/actual loss increase from N5.76 billion in 2013 to N6.19 billion in 2014.

Echoing similar sentiments, Alhaji Abubakar Barau, Deputy Governor of Central Bank of Nigeria, CBN, at a public forum in Abuja, said the nation’s banking sector is in dire strait due to the high incidence of fraud, especially electronically induced fraud.

Read also: Cybercrime: Nigerians fleece foreigners $9.3b annually

According to him, the spate of e-fraud, if not checked, is capable of jeopardising the fortunes of the banking sector.

The CBN boss who hinted of plans to collaborate with other agencies of government to stem the tide of bank fraud, said this has become inevitable in order not to erode confidence in the nation’s banking sector especially at a time concerted efforts are being made to ensure inclusiveness in the banking sector.

Modus operandi deployed by cyber criminals

Like most organised crimes, fraud in the banking sector is growing in sophistication and form, no thanks to advancement in technology.

Corroborating the foregoing, the NDIC helmsman disclosed that the types and nature of frauds and forgeries were largely web-based (online banking)/ATM card related, fraudulent transfer/withdrawal of deposit frauds and suppression of customer deposits amongst others.

Whodunit?

Investigation by Ripples revealed that most fraud within the banking sector usually has insiders’ complicity.

Confirming this development, a security expert attached to one of the new generation banks who asked not to be named, said more often than not, insiders have a hand in bank-related fraud.

The NDIC boss also confirmed this when he said: “It was discovered that temporary staff, clerks and tellers accounted for 64% of the frauds and forgeries in 2014, which require urgent attention to improve the electronic payments controls, IT security, human capital and integrity profiling as well as motivation of staff.”

International dimensions of cyber crime

It is instructive to note that cybercrime in the country has since assumed a global dimension with Nigeria said to fleece foreigners of an estimated $9.3 billion annually.

One man who should know better is Remi Afon, President, Cyber Security Association of Nigeria (CSEAN).‎

You may also like: 3 Nigerians picked for hacking US accounts

Afon who made this disclosure penultimate Thursday in Abuja, said activities of the cyber criminals have since expanded from phishing emails to “actual exploit through malware.”

While giving a bird’s eye view of the magnitude of crime, the CSEAN boss said: “It is estimated by Dutch investigation firm, Ultrascan that Nigeria-based cybercrime is costing around $9.3 billion (£5.5bn) globally each year.”

According to him, though there were no available statistics on volume of malware being generated from the country but “based on research by Palo Alto Networks in 2014 and fire eye 2015, activities of cyber criminals in Nigeria is now shifting from phishing emails to actual exploit through malware.”

Cybercrime, he observed, became rampant in Nigeria due to lack of appropriate cybercrime law in the past. Thankfully, he says with the cybercrime bill  now being passed into law, it will become easier for law enforcement agents to prosecute cyber criminals unlike in the past.

Way forward

While the passage of the cybercrime bill is heartening, analysts however argued that it is not enough in itself as a more holistic approach rather than cosmetic measures are required to tackle the menace of cyber-related crime.

Mazi Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria, CIBN, holds the view and very strongly too, that a total reorientation of workforce and management of the banks becomes inevitable to curtail the high incidence of infractions within the banking system.

Besides, he also advised, that the apex bank should enforce the existing policies on staff audit within the banking sector to flush out potential staff with criminal tendencies.

Pray, hope someone is listening?

 

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