DIGITAL commerce firm, Interswitch, said the banking sector lost a whooping N12.2 billion to electronic payment fraud between January to June 2023.
Banks affected by this are First Bank; Guarantee Trust Bank; Access Bank; First City Monument Bank (FCMB); Sterling Bank, Wema Bank, and Ecobank, among others.
Speaking during the Techconnect 3.0 conference in Abuja, the Head, Retail Payments at Interswitch, Suzan Fasipe, stated that N14.3 billion of the N35 billion in attempted fraud recorded in 2022 was actually lost.
In a report, Fasipe said 58% of fraud losses in 2022, or N8.3 billion, were committed through POS as well as Web and mobile platforms.
According to her, 37% of banks were victims of ransomware attacks between 2021 and present. Additionally, 93% of banking-related fraud, according to the company, was committed online.
Interswitch also said chargeback fraud could occasionally go unnoticed by banks for six months. This, it said, happens when a customer uses their credit card to make an online transaction and then asks the issuing bank for a chargeback after obtaining the goods or services.
When a chargeback is accepted, the financial transaction is cancelled, and the consumer is reimbursed for their money. Depending on the payment method used, the merchant may also be held responsible when a chargeback occurs.
Fasipe added that 96.2 percent of electronic payment fraud was caused by corporate fraud, which is the result of lax internal controls.
She added that in 2021, fraud involving their customers and workers cost four banks N1.77 billion.
At the event, Fasipe gave useful insights on bolstering current solutions to reduce fraud events, protecting consumers’ sensitive data, and navigating new market trends.
Stakeholders at the event examined financial inclusion initiatives and the crucial part regulators play in fostering digital financial inclusion.
The development draws attention to the growing security issues facing the banking sector as it works to strengthen the digital payment infrastructure.
A report had earlier pointed out that bank customers in Nigeria lost a total of N1.17 billion in the second quarter of 2022. Also, a total of 12,553 cases of fraud and forgeries were reported in Nigeria’s banking sector in the first three months (Q1) of 2023.
Source: Business Insider NG
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