Sunday, January 3, 2010

Electronic Banking Frauds Sharply Rising Due to Look-Like-Real or Cloned Scam Mails From Cybercriminals

There is concern over the rising cases of fraud in electronic banking in Nigeria. Banks like United Bank for Africa, GT Bank and Zenith, which are among those in the forefront of the competition to make service delivery easy and convenient for their customers have unwittingly gained the attention of the fraudsters.

The bank fraudsters have perfected the scam mails in such a way that the mails look cloned from the real mails from the banks. They come with the logo, appropriate use of banking terminology and exact general style of bank mails, to request unsuspecting bank customers to supply certain information, especially their PIN, for a purported upgrade of the data base. It is all fraud!

We note the efforts by some of the banks, especially GT Bank to educate the public on how to keep their PIN and secure information on their credit cards and use the ATM.

We also note the efforts of Interswitch, the banks switch network to educate the public on the dubious style of such e-mails and electronic banking fraudsters to defraud customers nationwide. We urge other banks to mount a similar awareness campaign to alert the public to the antics of these real and potential electronic banking criminals.

Although cyber fraud is a global phenomenon with hackers and brilliant IT experts focused on infiltrating security networks of various institutions and projects, there is need for a concerted effort to check the drift into criminality in our banks and other institutions.

We note that the US President Barack Obama in appreciation of the menace recently appointed a cyber fraud chief to check hackers infiltrating into strategic military and domestic operations of both private and public institutions in the USA. We think this is a good example to emulate.

This is because with the advent of 24/7 real time online banking, customers now have access to their accounts anytime of the day. Electronic banking products like Stand-alone Automatic Teller machines (ATMs), Internet, Mobile phones, Point of Sale terminals (POS) kiosks have become popular service delivery points in terms of availability and convenience for bank customers.

To make such smooth service delivery sustainable for the mutual benefit of the banks and their customers however, the banks need to do more to ensure security of transactions and safety of their customers’ deposits.

The banks must ensure that their staff are well trained and knowledgeable about electronic banking and products so that they can subsequently educate their customers on how to use such products, and not fall into the hands of mischievous standby helpers who could exploit such ignorance of customers to defraud.

Banks must also monitor their staff to ensure they do not connive with fraudsters within and outside the banks who are knowledgeable about electronic banking and information technology generally to defraud banks and customers.

This is because it has been established that most bank frauds – electronic or otherwise - occur with staff connivance. This thus requires the banks to do a diligent check on the background of bank staff at entry point, especially those to oversee such sensitive sections.

We call on bank management to ensure that they put in place information technology systems and programmes that are flexible, innovative, scalable and secure. They should ensure their IT systems have firewalls and security check points that deter hackers, unauthorised transactions and intruders.

The Central Bank of Nigeria (CBN) which is also affected in the scam mails, should play a greater role in monitoring electronic banking products. The CBN should urgently equip itself in terms of skilled personnel on IT products as it cannot monitor or regulate what it does not understand.

Lastly, we urge all bank customers using banking electronic products to be more vigilant, alert, and master the conditions of usage for any such product they carry in their own interest.

Electronic banking products offer great customer satisfaction in terms of speed, convenience and good customer relations. They also carry great risks for the banks and their customers and all hands must be on deck to check the trend towards fraud.

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