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Cybercrimes: Pressure on banks, others to comply with security standards

By BusinessNews Staff on June 30, 2014

The growing sophistication of cyber criminals and the attendant erosion of confidence in e-payment mode of transaction have roused financial authorities and other stakeholders to action with the call on banks and payment firms to comply with global security standards in order to check the criminals in their tracks, reports Festus Akanbi

In an economy adjudged to be the biggest in the African continent, the expectation is that adoption of e-payment mode in financial transaction, like the practice in other civilised climes, would be a matter of time.
And in line with this expectation, the Central Bank of Nigeria has since 2011 unveiled a robust payment system that takes a large chunk of people out of the banking halls for their transactions. This is largely driven by the need to save banks huge cost involved in currency handling; reduce robbery attacks; ensure convenience and monitor movement of financial transactions, among others.
To drive this advanced mode of banking transaction, the apex bank rolled out the cashless policy under which the twin sub-policy of mobile and agent banking are being vigorously pushed into the public domain.

The Rise of Cybercrimes
However, in spite of these laudable objectives, the reality is that the policy is yet to sink in the minds of many Nigerians, especially those in the informal sector of the economy, who still hold tenaciously to the old tradition of brick and mortal banking.
Financial industry analysts, however, believe that apart from a section of the banking public whose reluctance to accept the e-payment system due to ignorance and illiteracy, the rising incidence of cybercrimes and the attendant losses by bank customers can also be cited as a major discouragement to many Nigerians.
A most nauseating phenomenon among cybercrimes is e-mail scam. These schemes solicit and present false financial investment. There is no doubt that the activities of these criminals have continued to dent the country’s image.
For instance, the criminals usually send email that their victims are the named beneficiaries in the will of estranged relative and stands to benefit and inherit an estate worth millions. In some cases emails of unsuspecting members of the public are hacked with the criminals sending save-my-soul appeals to most of the victims’ contacts soliciting urgent financial assistance.

NDIC’s Intervention
In its interventionist role, the Nigerian Deposit Insurance Corporation (NDIC) has also waded in, promising to roll out insurance cover in support of the mobile payment policy. The thinking is that the insurance cover will go a long way in allaying the fears of members of the banking public in the event of problems in the course of transactions on any of the mobile payment platforms.
The Managing Director, NDIC, Alhaji Umaru Ibrahim, who gave the hint of the corporation’s intervention at a recent roundtable on mobile payment services in the country held in Lagos, said the move would further engender public confidence in the system, thereby promoting financial stability.
He said the NDIC framework for extending deposit insurance to individual customers of mobile payment services is already being finalised. He said: “The NDIC is equally actively involved in promoting financial literacy and supporting agency banking and non-interest/Islamic banking as strategies for attaining financial inclusion in the country in order to improve the economic wellbeing of the people who have been excluded in the formal financial system.” He also said a predominantly cash-based economy was not good for the system, noting that the corporation was in full support of the Central Bank of Nigeria’s cash-less policy.
“The NDIC as a deposit insurer provides a unique role of enhancing financial inclusion by encouraging mobile financial services. There is a link between deposit insurance system and financial inclusion.
“Deposit insurance is vital to financial inclusion because the poor need assurance that their deposits are safe and available at all times they have a need for them.”

Counting the Losses
There seems to be a consensus among the various regulatory authorities in the financial sector that the sheer volume of transactions compromised by the activities of cyber criminals and ATM thieves has caused serious setbacks to the adoption of e-payment system in the country.
The CBN maintained that the unrelenting cyber attack on the financial sector cost bank a whopping N40 billion last year.
The apex bank’s Chief Information Security Officer, Taiwo Longe, who gave the figures, said the economic cost of cybercrimes has assumed an alarming dimension such that its costs now far surpass that of illicit trade in narcotics.
According to him, the global cost now stands at about $288 billion, which far exceeds that of illicit drugs.
Relying on records at its disposal, the Economic and Financial Crimes Commission (EFCC) recently disclosed that Nigeria lost about N7.33 billion in 2007 to cybercrime, while recently a House of Representatives member was defrauded of N4.3 million and another fleeced of N600 million. Similarly, a banker swindled various customers of N2.2 billion as EFCC could only recover N600 million.
It was also revealed that MTN Nigeria’s transaction worth over N70 million in electronic recharge cards sent via email to a customer was intercepted by a cyber-thief in London, who later sent it to another scammer in Nigeria for sale. Various speakers at the just-concluded first 2014 National Cyber Security Forum (NCSF) in Lagos were of the opinion that collaboration with youths may provide the solution for ending cybercrime since the age brackets of cyber perpetrators are usually in the range of 15 to 35 years.

Cyber Threat Real
Also commenting on the menace of cybercrime, Dr. Eugene Juwah, the Executive Vice Chairman of the NCC, lamented that cyber threat is real and that it can be a threat to national economy and national security. “Today, the cyberspace has become an integral part of modern information society. Vast amount of information are available in different formats for end-users. The real concern is not just with the dissemination of inaccurate or misleading information but with malicious content. Fraud, theft and forgery exist online just as they do offline. If users are to get the benefit of the internet, then confidence in the information infrastructure is primary and of utmost importance.
“The commission receives complaints frequently from the International Criminal Investigation Organisation (ICIO), the police and EFCC on cybercrimes committed by some Nigerians through the internet, both locally and abroad. Cyber threats are becoming more sophisticated as organised online criminal groups continue to increase. The internet has long ceased to be the exclusive domain of the technically savvy users, user-friendly software and interfaces enable all types of users, including novices and children, to interact remotely. This new territory contains a goldmine of valuable information and potential victims. The complicated infrastructure of the internet also makes it more difficult to track down criminals.”

CBN Mounts Pressure on Banks
To stem the tide of cybercrimes, Longe disclosed that the CBN is said to be engaging the banks to comply with some basic currently global security standards in the management and security of customer information, stressing that the apex bank has, indeed, ensured compliance with such standards itself.
“While there are a number of international security standards that organisations are to comply with, some of which are sector specific, the CBN has directed all Nigerians banks and other payment switching companies to comply with the Payment Card Industry Data Security Standard, (PCI-DSS).”
“Cybercrime is on the increase, hence there is need for all stakeholders to join hands together to fight against this menace. This is particularly germane given the efforts being made by the CBN to achieve a cashless society. So, there is a need for latest security standards to be adhered to by the players in the financial transactions value-chain,” he said.
Longe spoke during the opening session of National Cyber Security Forum (NCSF 2014) organised by the Office of the National Security Adviser (ONSA) in Lagos, with the theme: “Towards Multi-Stakeholders Partnership for National Cyber Security Engagement.”
The CBN official disclosed that cybercrimes are usually perpetrated through web phishing, network intrusion, emails and other methods. He advised every organisation to take the issue of having a security blueprint in place very seriously. He added that there is need for proper information security management to reduce ‘vulnerability and risk’ of attack. He said with the growing threat of cybercriminals, the need for policy framework to address the menace has become more imperative now than ever before. He added that awareness is another key element in driving the process of fighting cybercrimes because people must be aware of the potential risk they face so that they could take precautionary measures.
Citing a 2013 CBN yearly report of the industry, Longe said cyber security has become an issue that the apex bank was taking with all seriousness and thoroughness in the on-going cashless economy scheme.
Expressing the readiness of the apex bank to provide the leadership in the war against any fraud in the banking system, Longe said the CBN was not unaware of the need to collaborate with various industries stakeholders with a view to ensuring that banks and other players in the financial services sector ensure maximum information security.
“Information security is concerned with the confidentiality, integrity and availability of data regardless of the form the data may take: electronic, print, or other forms.
“Financial institutions, hospitals, telecommunication, corporations and private businesses amass a great deal of confidential information about their customers, employees, products, research findings and financial status among others.”
Longe therefore called for maximum security of customers’ information which is collected, processed and stored on computers and transmitted across computer networks.
“When any of the confidentiality, integrity and availability of data is impacted, security is said to have been breached. There are various threats to information security. Some are very dangerous and disruptive; others are just a nuisance.”
He maintained that the fight against cybercrimes and other threats to information security can only be won through the agreement of robust information security policy framework.

[This Day]

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