The Economic and Financial Crimes Commission (EFCC) says about 70 per cent of frauds in the banking sector are caused by insider collaboration.
Hence, the Commission and other stakeholders insisted that there is a need to sanitise the banking sector against harbouring fraudsters and collaborators, improve identity management and create strict regulations to safeguard the country’s wealth.
According to the Financial Institutions Training Centre (FITC), Nigeria’s financial services industry has seen an increase in incidents of fraud amounting to ₦159 billion in the last four years.
This comes as the EFCC and the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) said there was a need to urgently address internal and external factors escalating fraud in the country.
EFCC noted that the challenges from the banking sector and collaboration of bankers with external bodies fuel over 70 per cent of fraud cases in Nigeria.
EFCC said this yesterday in Abuja as the ACAEBIN sought ways to address challenges in the banking sector. The stakeholders, who said all Nigerians have a part to play in sanitising the financial sector in the country, noted that there is a need for urgent solutions to the foreign exchange crisis in Nigeria and the rapid loss of investor’s fortunes.
The audit executives who are also calling for regulations that would address the challenges that could emerge from the rise in the use of artificial intelligence in the financial sector noted that the data challenges in the country are creating challenges for banks Know Your Customer (KYC) and tracking of financial crimes.
Chairman of EFCC, Ola Olukoyode, speaking at the yearly retreat and general meeting of ACAEBIN said the rising banking fraud in Nigeria is mostly within the sector.
Represented by the Director, Internal Audit, EFCC, Idowu Apejoye, said: “Broadly speaking, banking fraud in Nigeria is both inside and outside related. The inside-related fraud comprises outright selling of customers’ deposits, authorizing loan facilities, forgery and several other kinds of unhealthy and criminal practices.
“The outsider-related ones include the hacking, ATM fraud, conspiracy among others and then the absurd one is when both collaborate among the bankers and then the outsider.
“That one is the one that is absurd because when you do that, that means you are selling out the system. It is estimated that about 70 per cent of financial crimes in Nigeria are traceable to the banking sector, this scenario is disturbing and unacceptable”.
Chairman of ACAEBIN, Prince Akamadu said there is a need to explore all options in fixing the foreign exchange crisis and monetary policy in the country.
While noting that the association is looking at solving some of the problems at the retreat and looking for leeway for sustainable growth in the country, Akamadu said there is a need for retrospection on the crisis in the country.
“Have we done enough? What more can we do to help sanitise the system? Are there things the banks could do to help in sanitising the FX in this country? By the end of this retreat, we are expected to come up with a communique and we hope to address some of the issues, one way or the other, that will address the role of banks in FX challenges in this industry.” He insisted that the issue of KYC, which he said has been a priority for the banks, is beyond the bank.
“I’m not aware there’s any institution, any sector that has done more in the area of KYC than the banking industry.
“But it truly goes beyond the banks. And I can tell you truly again that even at the Bankers’ Committee level, and even at the typical details of banks in Nigeria, these are areas we are looking at to see where there are leakages, if any, within the system and to begin to block them and if it is anything to go by, this seems to be going down it also involves customer enlightenment and sensitisation,” he said.
The second vice president of the association, Mogbitse Atsagbede, noted that the role of artificial intelligence in the bank outweighs the challenges.
He noted that while the role would revolutionise the sector, there is a need for a proper regulatory framework, especially around data and privacy.
In her remarks, Aina Amba, the vice chairman of the association said that the banking sector in Nigeria, over the years has evolved through several processes making it seamless for customers.
She explained that with the new open banking initiative that is being brought on board, banking will be taken as a lifestyle. “What I mean by this is, when we start the journey with a customer, we grow through the entire lifecycle with them. We see each customer as unique and we will be able to bring specific products that solve their problems.”
