Fintech: Nigerians lose N51bn to cybercriminals

LEADERSHIP 

Nigerian banking customers have lost a whopping N51 billion savings to fraud, even as cybercriminals are now targeting Fintech bank customers to defraud them, LEADERSHIP can exclusively reveal.

Between 2019 and July 2023, banking customers lost N50.5 billion to banking-related fraud, a situation that soared last year and early this year as a result of the cash crunch in the country following the naira redesign and cash withdrawal limit policies of the Central Bank of Nigeria (CBN).

With over N9 billion lost to fraud in the banking system as of July 2023, there are indications that the figure could rise to over N20 billion by year end as cybercriminals intensified their effort to defraud customers of Fintech banks across the country.

Data sourced from the Nigeria Inter Bank Settlement System (NIBSS) show that, while losses to fraud in the financial industry in the first quarter stood at N51 billion, the figure rose to N9.5 billion by July 2023, thereby bringing the total amount lost to fraud from 2019 to July 2023 to N50. 5 billion.

The renewed move by cybercriminals to defraud Fintech bank customers was because of penetrable security measures adopted by these Fintech banks, since they are meant to be just payment platforms.

However, most market men and women, artisans and some entrepreneurs have misconstrued their function to include deposit money banks, thereby withdrawing larger chunks of their savings in regular banks into these Fintech banks, a development that has seen many burn their fingers in the process.

Fintech banks, by their creation, are meant to be payment platforms, a transactional bank to effect payment for goods and services, because of speed in service delivery. While they are observing this function very well, the porous securitisation of these platforms have allowed criminals to gain access to people’s accounts and withdraw all or most savings. And in most cases, when these cases are reported, it is usually difficult to recover the money because perpetrators always use Point of Sale (PoS) machines or trading platforms for the dubious withdrawal, with the lack of physical offices affecting recovery of such fund.

The Fintech banks affected by this development include OPay, Palmpay and Moniepoint, among others…