Nigerian banks may lose billions to scammers this year


 ………. How to protect yourself

Alhaji Umaru Ibrahim
Alhaji Umaru Ibrahim, CEO, NDIC

With all the advancements made and the resources committed to cyber security in the country, there are fears that Nigerian banks may be hit by multiple attacks this year. Kaspersky Lab’s experts who sounded this alarm recently said such attacks would be aimed at getting the financial and personal data of Nigerian users of personal computers and mobile phones. Dirk Kollberg, Senior Security Researcher, Global Research & Analysis Team at Kaspersky Lab said many Nigerian companies may also lose their data to cyber thieves during the year.

It would be recalled that fraudsters stole ₦6.2 billion from Nigerian banks and their customers in 2014 as against ₦5.76 billion in 2013, with majority of the cases related to Internet banking and ATM scam. The Nigerian Deposit Insurance Corporation (NDIC), which made this disclosure in its 2014 Annual Report, said the number of such scams grew astronomically from 3,786 cases in 2013 to 10,612 in 2014 and they involved ₦21.8 billion and ₦25.6 billion in 2013 and 2014, respectively. Some security experts, however, insist that financial institutions in Nigeria loss about ₦50 billion annually to cyber attacks.

A recent security assessment of Nigerian banks’ websites by Easy Solutions Limited showed that electronic fraudsters had invaded Nigerian banking environment, deploying over 185 fake mobile applications on the websites of 15 banks. The fake mobile applications are used to extract customers’ personal and financial information with a view to stealing money from their accounts.

Banks are also said to be confronted with defacement attacks on their websites as well as email spamming targeting both banks and customers’ emails. Other cyber attack methods that have been identified include hacking, social engineering, malware, pharming, SQL injection, brute force attacks, weak passwords, internal security breaches, among many others.

With the rapid increase in Internet-based banking services and online data storage, the risk of cyber attackers attempting to compromise the system and customers’ sensitive financial data is no doubt going to be on the increase, a situation that makes it imperative for financial institutions, organisations, governments and individuals to take the issue of cyber security of their electronic business platforms seriously.


Tips on how to secure your account

Electronic fraud has remained a serious threat to payment system efficiency, consumer confidence, and banks’ bottom line. It involves tricking the user to steal confidential information, passwords, PINs through fake websites. With the increasing popularity of social media networks and the number of people having Internet service, online fraud has continued to grow. To safeguard their funds therefore, there is need for banks and their customers to stay ahead of fraudsters.


The following tips could be of help to banks and their customers:


Review, create and deploy security strategy

Most cyber attacks have been traced to weak IT infrastructure. Banks and other businesses should review, create and deploy a complete security strategy that will include multi-layered endpoint protection. They could also implement encryption for communication and sensitive data. Individuals should likewise invest in robust security solution for all their devices and switch to encrypted communication.


Be wary of mobile apps

App stores are full of fake apps claiming to come from banks. When a customer downloads and enters his or her financial information, including credit/debit card details and personal identity numbers (PIN), a fraudster could immediately clone the cards or transfer money from the account through online transaction.


Be wary of malicious emails

Many scammers have now devised means of evading spam blockers, so the possibility of their fraudulent mails getting into your inbox is still a reality. These fraudsters send phishing emails to people everywhere. They duplicate the image of a genuine company or known person and create websites similar to a genuine business. Recipients are usually asked to follow a hyperlink or link attached to the email but, of course, such links would direct you to a fake login page on fake website where your personal details are then harvested for fraudulent purposes. If you are not sure of the source of a mail, do not follow any link provided in it. You can do an online search to confirm the identity of the sender or the organisation he/she represents. Make a phone call on the subject of the mail received. If they don’t know anything about it, delete it immediately.


Do not send personal information by mail

Many Nigerians have lost their savings to scammers they had earlier sent the security information to. No bank will ask you to send your password or personal information by mail; send such sensitive data to an employee; or change your password to enable them update and secure your account. If you have any doubt, call your bank directly for clarification.


Be careful when dealing with contacts

The person you are talking to on phone, through email or on social networking site may be a scammer leading you into a mouth-watering business, promo or deal for the purpose of making you transfer your money to the scammer’s account. Be wise, if it looks too good to be true, it probably is.


Be careful when you are shopping online

Do not give your electronic card details or online account details to a person or organisation you don’t trust. If you are not sure of your online shopping platform, carry out an investigation to establish their identity before computing your e-card details on their portal.


Be wary of virtual currency

Virtual currencies are becoming increasingly popular. They allow you to transfer money without having to use banks. A good example is the bitcoin which uses a cryptographic technology called blockchain that builds a shared and publicly verifiable database of transactions to prevent fraud. This creates trust between sellers and buyers. Transactions in virtual currencies are said to be cheaper, faster and more transparent. However, they have their disadvantages which include the fact that they are untraceable, payments are irreversible, wallets can be lost and there is no buyer protection, among others. The International Monetary Fund (IMF) noted in a paper recently that “virtual currencies do not fulfil the three economic roles associated with the money because of their high price volatility, limited acceptance due to lack of legal tender status, and lack of evidence that they are an independent unit of account.” They differ from e-money, which is a digital payment mechanism denominated in official currency. Consumers are therefore advised to be wary of the use of virtual currencies in their online transactions.


Guard your activities on social networks

The kind of information you give about yourself or your activities on social networks may make you the subject of a scam. The smart thing to do here is to be careful so as not to fall victim.


Keep your bank documents safe

Your cheque books, credit/debit cards and all other financial documents should be kept safe.


Don’t allow easy access to your mobile devices or computers

Make sure these devices are secured with password protection and up-to-date anti-virus; and do not share access with others. Ensure that your security software and back-up are up to date. Do not give a fraudulent person easy access to these devices because they can harvest your financial details and other important information.


Using public computers or WiFi for online financial transactions is not safe

Do not expose yourself to risk by using public computers in business centres or cyber cafes to carry out online financial transactions or provide private information. Whatever you delete can be accessed for the purpose of hacking into your bank account. Using public WiFi for online banking transactions may increase your risk of being defrauded.


Avoid using passwords that can easily be guessed

This include the name of your spouse or child, your other name, name of your pet, name of your favourite football team, for your online platforms. Create strong passwords that include mix of upper and lower case letters, numbers and symbols. For your card PINS, avoid using numbers that can easily be guessed such as 1234, 2222, 4444, 9999. Do not use the same PIN for all your electronic cards.


Banks should employ quality staff

A high percentage of electronic fraud involving banks in Nigeria has been traced to poor internal control due o the prevalence of contract staff in their system. According to Umaru Ibrahim, Managing Director, Nigeria Deposit Insurance Corporation (NDIC), “Temporary staff, clerks and tellers accounted for 64 per cent of the frauds and forgeries in 2014 which required urgent attention to improve the electronic payments control, IT Security, human capital and integrity profiling as well as motivation of staff.” Many bank clerks and tellers are poorly paid and therefore have a higher tendency to commit or aid the commission of electronic fraud. Banks should therefore ensure their staff, whether permanent or contract staff, are well remunerated.

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