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Why Nigerian Banks Will Keep Losing Money to e-Fraud

10:30 ET, 21 November 2013

The recent loss of money recorded by the Central Bank of Nigeria (CBN) has not only given researchers a case study but has shown that the acclaimed tools and techniques currently used by Nigerian banks are not sufficient. This is regardless of the source of the tool or technique used. As technology growth is in parallel with the time it is also essential for every organisation and nation to improve themselves. It is not enough to get involved with the technology by purchasing gadgets but it is paramount to keep abreast of all and sundry regarding technology- that is,  in this case- security.

The lack of awareness by users of Nigerian e-Banking system create a rift in eliminating the cause of this problem, although some experienced users protect themselves but the percentage is minimal compared to the incidents reported.

In a paper published by me some months back, I did mention certain causes of hacking in Africa. Most importantly is the growing use of technology. Many banks around the world are targeted and a lot have lost money to e-Theft but the drastic incidentrecovery measure taken, give investors confidence in these banks. This is a major problem for the growing Nigerian economy. The protective measures have proven to be insufficient, not good enough or irrelevant. What is the CBN doing to ensure the security of customers?

During one of my research visits to Nigerian banks, I was astonished to hear “we have that in place” when banks were undergoing attacks. Sadly, you cannot impose help on those who really need help but do not acknowledge they do. If banks such as World Bank and Bank of America can look for research students like me to have us use their organisations as case studies, why will Nigerian banks think they have it all? Truth be told, we are still a developing country and do not have it all. No nation or bank does but it is important to know the loopholes and backdoors that attract these hackers.

Following quite recent news in one of the Nigerian online media, it was quite interesting to read about a Nigerian hacker. A young Nigerian student who stole couple of thousands from a bank account to purchase some petty items was an intriguing case to read. What was most appalling however, was the knowledge that he had been arrested. True he is a thief, but Microsoft for instance, regards these thieves as assets. They get these guys to break into their system, do not report them to the authorities, in the end give them some stipend and little treat to say “thank you for showing us how you do it; we will now block you all from further entry and theft”. Where is our sense of “quick-thinking”? It is not always about behind bars but about what to do to stop further problems of this nature.

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