CIO East Africa (Nairobi)

23 June 2014

Nigerian Banks Lose Over U.S. $978 Million to Cybercrime

Nigerian banks lost a total of N159 billion (US$ 978 million) to electronic fraud between 2000 and the first quarter of 2013, Nigerian Inter-Bank Settlements Systems (NIBSS Plc) has said.

According to Nigeria Communication Week, NIBSS added that the successful switch from magnetic stripe for automated teller machine (ATM) cards in 2009 to a more secure chip and PIN cards led to a drastic reduction in e-fraud to the tune of N21.72 billion with a further decline to N14.96 billion in 2010.

Another pubication - Leadership newspaper - reported that a fortnight ago, Adebayo Adelabu, deputy governor, financial systems stability, Central Bank of Nigeria, said 2.4 per cent of banking revenue was lost to fraud cases. While quoting from the 2013 Global Fraud Report, he revealed that Africa retained its position as the region with the largest fraud cases, while sub-Saharan Africa maintained the unenviable position of the region with the most prevalent fraud problems (77 per cent) among the regions surveyed.

Admonishing banks and telecom operators at a workshop organised by WiniGroup Limited, a Nigerian IT security solutions provider in Lagos, Shahar Alon, business development manager from Checkmarx, Israel's leading Static Application Security Testing (SAST) developer, said Nigerian banks and telecom operators must collaborate to protect the economy from cybersecurity threats.

Alon said collaboration should be part of the lifecycle of any professional in charge of security, noting that it will be a natural response of industry to understand that, in order to survive, chief information officers (CIOs) would have to collaborate.

"If a bank in Nigeria falls, it is going to affect all other banks," Alon said, adding that it is not a specific problem of one bank and that once the community understands they are in this together, they need to make sure that all banks, all businesses, all e-payment companies are secured.

He said it is the responsibility of all to collaborate, noting that, as the years come, the challenges will grow while those who refuse will be left behind with no collaboration to function in a group in the cyber battlefield.

"We recognize Nigeria as the giant of Africa; we recognise the economic development of Nigeria in recent years and we know the future will bring a lot of opportunities to the Nigerian market. One thing Nigeria must deal with is make sure it preserves a reputation of secure environment for businesses to operate in.

"And while doing that, cyber is a critical aspect of this reputation because if banks and businesses are not able to operate securely it will affect the whole economy. He said making sure they are secure from a cyber point of view is an essential stage Nigeria will face in the years to come.

"We feel that there is a big realization among businesses in Nigeria of the need to have secure development and make sure any application and software is secure from any vulnerability.

On his part, Tim Akano, vice chairman, WiniGroup, said the challenges of cyber frauds and cyber terrorism are growing and organisations and nations are not taking the battlefield lightly. He said nations have deployed cyber soldiers to protect their cyberspace and economy from being crumbled with distributed denial of service (DDOS) attacks and malware that can cripple their networks.

Akano said Nigerian banks, telecommunications companies and governments must as well deploy trained cyber soldiers to protect critical national infrastructures from going down through cyber attacks.

He said WiniGroup exists to bridge the technology divides between the West and Africa, leveraging on cutting-edge software and hardware solutions to drive cost southward, eliminating wastes and growing revenue for its clients in Africa.

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