Fintechs in the country are set to launch a framework that will help them fight against the escalating threat of fraud within the county’s electronic payments ecosystem.
The FinTech Association of Nigeria Chief Executive Officer’s Committee disclosed this in a statement signed by its Head of Projects and Relationships, Seun Folorunso.
According to the association, the framework is set to improve fraud reporting and risk mitigation and should be released by January alongside a technical standard.
The committee stated that its action was aimed at preserving the integrity of the country’s digital infrastructure.
“We understand the delicate balance between safeguarding against fraudulent activities and respecting the privacy and regulatory frameworks that govern our industry. It’s not a trivial challenge, and the implications of missteps are significant,” the Chairman of FintechNGR’s CEOs’ Committee, Uzoma Dozie, said.
The committee further stated that its approach aimed to address the foundational issue of thwarting malicious actors without compromising privacy and regulatory compliance.
It added, “This initiative has garnered strong support from numerous financial institutions and fintech companies, and other related parties demonstrating a collective commitment to fortifying the security of the entire banking and fintech communities.
“The establishment of the Fraud Prevention and Risk Management Sub-association marks a significant milestone in the ongoing efforts to uphold the trust and security of Nigeria’s digital financial landscape.”
The rise of online payment has led to the growth of online fraud.
In the first quarter of 2023, cashless transactions in the country grew by 44.84 per cent to N126.73tn from N87.49tn in the corresponding period of 2022.
Recently, FITC reported that electronic payment fraud hit 78,584 cases in a year.
In its ‘Reports on Frauds and Forgeries in Nigerian Banks,’ the firm noted that the growth was being recorded on e-payment channels such as computer/web, mobile, and Point of Sales.
It stated that between the second quarter of 2022 and the second quarter of 2023, over 10,098 fraud cases involving N1.95bn were recorded on PoS channels. 34,772 computer-based fraud cases involving N18.97bn were recorded and 33,714 mobile (phone) based fraud cases involving N6.48bn were recorded.
In 2022, the Chairperson of CeBIH, Ms Celestina Appeal, noted the growth of online fraud, “Today, more purchases are done through online payments. e-banking is now globalised. But as things become seamless, there will be risks.
“The fraudsters are also trying to expand their strategies. Every year, the finance sector records losses in billions. According to NIBSS’ reports, the volume of fraud successfully carried out has increased about four times between 2019 and 2021.”