Cybercrime Epidemic Hits Nigerian Financial Institutions
A staggering N15 billion (US$39 million) loss was recorded by commercial banks in Nigeria to electronic fraud and cybercrime in 2018, a 537% increase from the previous year’s N2.37bn loss. The figure is expected to rise exponentially as the country’s financial institutions struggle to combat the growing menace of cybercrime.
The Growing Threat
According to Deloitte Nigeria, phishing attacks, malicious spams and ransomware attacks have skyrocketed since the outbreak of COVID-19, with hackers using the pandemic as bait to impersonate brands and mislead customers and employees. The firm noted that financial institutions, corporate businesses, state agencies, and private individuals are increasingly being exposed to cyber-attacks and fraud through disinformation, impersonation, and other mechanisms.
- Phishing attacks have increased significantly since COVID-19
- Hackers use the pandemic as bait to impersonate brands and mislead customers and employees
The Impact on Nigerian Banks
Google claims to block over 100 million phishing emails daily worldwide, with about 18 million related to COVID-19. However, Nigerian bank customers and staff remain at risk of exposure to opportunistic schemes by fraudsters who have latched on to the uncertainty created by the pandemic.
- Nigerian banks are at risk of exposure to cyber-attacks and fraud
- Hackers use phishing emails and malicious spams to deceive customers and employees
The Role of Law Enforcement
The Economic and Financial Crimes Commission (EFCC) has arrested several suspects believed to be members of an Organized Cyber Criminal Syndicate Network (OCCSN), who defrauded unsuspecting victims of millions of Naira. The commission also recovered a significant amount of stolen funds from hackers, including a seven-man gang that stole N900 million (US$24,000) from a single bank via malware in Lagos.
- EFCC has arrested several suspects believed to be members of an OCCSN
- Commission recovered stolen funds and arrested fraudsters
The Way Forward
In response to the growing threat, banks in Nigeria have taken extra measures to warn customers about the dangers of cybercrime and to encourage them to be cautious when using electronic channels. The government has also promulgated the Cybercrimes (Prohibition, Prevention, etc) Act, 2015, which designates certain computer systems, networks, and information infrastructure vital to national security or economic and social well-being.
However, experts have criticized the Act for pushing the responsibility for combating cybercrime from the state to financial institutions. They argue that this approach is inadequate in an era of digital economy where most financial transactions take place outside banking premises.
- Experts criticize the Cybercrimes Act for pushing responsibility to financial institutions
- Approach is inadequate in a digital economy
Recommendations
Instead, they recommend partnerships between state security agencies and financial institutions to deal with the problem jointly. This would require amendments to the Cybercrimes Act to give effect to collaboration and partnership while ensuring due consideration to privacy protection balanced with law enforcement.
- Partnerships between state security agencies and financial institutions are recommended
- Amendments to the Cybercrimes Act are needed
Conclusion
In conclusion, cybercrime is a growing menace that poses a significant threat to Nigerian financial institutions. To combat this problem, financial institutions must build their institutional capacity to deal with cybercrime by staying abreast of criminal innovations and technology designed to disrupt these invisible yet devastating crimes. Additionally, partnerships between state security agencies and financial institutions are recommended to deal with the problem jointly.