Cashless: BVN Reduced E-Fraud By 63% — Report

The rate of e-fraud in Nigeria in terms of value reduced by 63 per cent in 2015, partly due to the introduction of bank verification numbers (BVN), according to a report by FBN Quest Research.

Today News report continues:

The research firm said the adoption of e-payment channels and the rapid evolution of the e-channel ecosystem increased the incidence of electronic fraud.

“The rate of e-fraud in terms of value reduced by 63 per cent in 2015, partly due to the introduction of bank verification numbers (BVN). However, the volume increased significantly by over 500 per cent compared with 2014.

“Similarly, data released recently by Nigeria Information Technology Development Agency (NITDA) suggests that there were 3,500 cyber-attacks with 70 per cent success rate and a loss of US$450 million in 2015,” it said.

The report explained that cyber criminals employ several techniques to perpetrate e-fraud such as data theft; email spoofing and phishing just to mention a few.

However, it noted: “The Electronic Fraud Forum (NeFF) unit created by the Central Bank of Nigeria (CBN) plans on combating these with effective fraud strategies by collaborating with banks and government agencies.”

Also, the latest annual NeFF Report from the CBN captures views from deposit money banks (DMBs) on e-payment channels in 2015. The report revealed that there was a sharp increase in phishing attacks last year.

Despite the prevailing macro challenges, e-channel platforms such Internet banking, mobile banking and so on, have experienced significant growth in Nigeria. “E-channel platforms play a vital role in shaping developing economies.

For government, it encourages improved transparency; as for consumers, it is more convenient and often times relatively cheaper, thus leading to increased business activity and higher purchases for companies,” the research firm said in the report.

According to the report, cyber security needs to remain a priority for all stakeholders in order to encourage continued patronage of this platform.

Meanwhile, an industry report obtained from the Interbank Settlement System PLC (NIBSS), revealed that the Nigerians banks have issued over 24 million Bank Verification Numbers to their customers as at end of March, this year.

According to NIBSS, while over 30.1 million account holders had enrolled for BVN, only 24 million had received their verification numbers.

As such, over six million bank customers, who have enrolled for the exercise, are yet to be issued BVNs according to the data analysis.

Meanwhile, the number of enrolled bank customers represents about 34.7 per cent of the total 86.5 million banks accounts opened by government, corporate and individuals with various banks in the country.

The purpose of the project is to use biometric information as a means of first identifying and verifying all individuals that have account(s) in any Nigerian bank and consequently, as a means of authenticating customer’s identity at point of transactions, said Chief Executive Officer, NIBSS, Mr. Ade Shonubi.

He said the BVN exercise would also provide a uniform industrially accepted unique identity for bank customers, to authenticate transactions without the use of cards using only biometric features and Personal Identity Number (PIN) identification of blacklisted customers.

According to the monthly analysis of the NIBSS latest data on banking accounts and BVN enrollments, starting from January 2015, it was noted that that 2.2 million accounts were enrolled in January; 2.7 million in February; 3.3 million March and by April, May and June, the figures had increased to 7.7 million; 9.2 million and 12.4 million respectively.

In July, August and September, the figure rose to 12.7 million; 13.7 million and 14. 5 million accounts while in the last quarter of the year, 16.3 million accounts were enrolled in October; 21.2 million in November and in December, the figure stood at 28.2 million.

In January this year, the number of enrolled bank accounts for BVN further increased to 30.1 million. The January figure is the latest in the industry.

The data has also revealed that the number of bank accounts opened with different banks in the country so far had reached 86.5 million.