Insecurity, fraud clog financial inclusion stride

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As fiscal and monetary authorities collaborate to ensure that Nigerians keep up the 63.6 per cent financial inclusion stride with the aim of attaining the set target of 20 per cent exclusion rate by 2020, the frightening series of bank robberies and frauds in the system may have put a lid on the agenda.

For instance, the N12.3 billion lost by the banking industry to various frauds in a spate of four years, with electronic fraud projected to hit N6.1 trillion by 2021, may have become albatross to the Financial Inclusion Strategy (FSS) 20:2020.

Although, the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has pledged to foster the development of a robust payments system infrastructure that would increase access to finance for all Nigerians, “thereby raising the financial inclusion rate in the country,” but many banks are, in the meantime, exploring alternative routes instead of relying on physical branches to, at least, help keep tight rein on insecurity.

“With the rise in digital payments and cyber security threats, we will develop a robust mechanism that will help ensure that the necessary safeguards are put in place by banks and financial institutions to protect against loss of data, fraud and cyber incursions in their respective systems,” Emefiele had said while unveiling his vision and policy thrust for the next five years in Abuja last June.

But In a statement at the weekend, one of the banks says it is going to adopt new ways to enable its customers access banking services conveniently via another shortcut to boost FSS.

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“As part of our focus on providing our customers with simpler, smarter banking services,” it explains, “we are continuously adopting new and efficient ways to enable them bank at their convenience.

“Through our alternate channels *826#, UnionMobile and UnionOnline, we have made responsive banking services available 24 hours a day, seven days a week. We have also commenced the rollout of our Agency Banking network which brings us even closer to our customers and creates employment opportunities for people in many communities across the country.

“Understandably, these more convenient banking channels will result in decreased dependence on some of our physical bank branches. In line with this, we have received regulatory approvals to close down some of our branches as we continue to expand our digital banking offerings and improve our customers’ experience.

“We assure our customers of our continued commitment to providing simpler, smarter services as we adopt more ways to serve them better.”

The bank was actually reacting to an enquiry on the supposedly rumour and confirmed that it had started closing down unviable branches, in the wake of bank attacks across the country.

Just last Tuesday, robbers attacked a branch of a commercial bank in Iju , Akure North Local Government Area of Ondo State.

The following Friday, August 9, a 30-year old branch of Union Bank in Itaogbolu, a nearby community, was shut down . Residents told Daily Sun that the management of the bank attributed the action to new strategy of closing down unviable branches.

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However, it was not only Union Bank that beat a hasty retreat to avoid bandit attack in remote areas.

The victim-lender of the latest incident, Wema Bank, Iju , Ondo State, was reported to have been flattened after the attack. Its customers now have to travel 16 km to Akure, the state capital, to enjoy banking services.

In April, First Bank had to shut its Idoani, Ondo State, branch following another robbery attack.

The previous April, four commercial banks were reportedly shut in Offa , Kwara State, following another terrible robbery.

As for cyber attack, the Director of Consumer Protection Department (CPD) of the apex bank, S.K Salam-Alada, who was represented by Ibrahim Hassan, Assistant Director, CPD at the 2018 annual workshop of the Nigeria Deposit Insurance Corporation (NDIC) for Business Editors and Finance Correspondents in Benin, Edo State, warned that electronic fraud poses a major threat to the attainment of the financial inclusion target of 20 percent inclusion by 2020.

According to the 2018 Financial Inclusion Survey by Enhancing Financial Innovation and Access (EFInA), 63.6 per cent of Nigeria’s adult population of 99.6 million have access to financial services, while 36.8 per cent, or 36.6 million of the adult population are financially excluded.

At the launch of the survey last January in Lagos, Mr Niyi Ajao, the then acting Managing Director of the Nigeria Inter Bank Settlement System (NIBSS), said there was the need to do more if the country would meet the 20 per cent exclusion rate by next year.

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Mr Adebisi Shonubi, the erstwhile Managing Director of the organization had last year announced that the banking industry lost N12.3 billion in 41,461 fraud cases between 2014 and 2017.

Giving a breakdown, he explained that 2014 fraud volume stood at 1,461; 10,743 in 2015; 19,531 in 2016 and 25,043 in 2017.

Shonubi said the industry lost N6.22 billion in 2014 on attempted fraud value of N7.76 billion

He added that the sum of N2.26 billion was lost in 2015 on attempted fraud value of N4.37 billion in 2015.

According to him, the industry lost N2.19 billion in 2016 on attempted fraud value of N4.37 billion..

On fraud channel, Shonubi said the Automated Teller Machine (ATM) accounted for the highest fraud in 2017 with an actual loss of N497.64 million with a fraud volume of 9,823.

According to him, mobile trailed it with N347.65 million loss on 5,055 fraud volume, while across the counter transactions accounted for N259. 02 million loss in 314 fraud volume.

He said that “while fraud trend is generally on the decline, mobile fraud trend alone is on the increase.”

Shonubi warned that mobile fraud would overtake ATM fraud by 2020 with the rate of increasing fraud in the channel.

He listed the top three mobile threats in Nigeria to include phone theft, SIM swaps and kidnaps.

Shonubi, however, called on Nigerians to shield themselves by ensuring phone lock, SIM lock, swap/recycle checks.

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(The Nation)