The Fintech Association of Nigeria (FintechNGR), the umbrella body representing fintech players in the country, has announced initiatives to tackle the rising incidents of fraud on digital payment channels. The association’s CEO’s Committee revealed plans to introduce a fraud reporting framework in 2024, as stated in a released statement from Lagos. The Committee emphasized the critical nature of addressing these challenges promptly to safeguard the integrity of the digital ecosystem, which has gained international acclaim. The proposed framework seeks to combat fraud while ensuring adherence to privacy and regulatory considerations related to data centralization and reporting.
Escalating Fraud Challenges
Recent media reports highlight a concerning trend, revealing that three Nigerian fintechs suffered losses exceeding N5 billion to hackers in the first eight months of this year, coinciding with a surge in hacks and fraud within the ecosystem.
While numerous other incidents, involving undisclosed amounts in the billions, have been reported, it has become apparent that the situation is becoming more complex, with some heists involving staff members of the affected fintechs.
Industry sources indicate that this has evolved into a significant challenge for fintech companies in Nigeria. Of particular concern is the vulnerability of well-secured platforms to attacks originating from connected fintechs, where a breach in one platform with inadequate cybersecurity measures can compromise an otherwise secure platform.
This heightened risk recently led a commercial bank to sever connections with several fintechs on its platform, temporarily disrupting the ability of its customers to send money to the affected fintechs, although the issue was eventually resolved.
FIntechNGR intends to unveil its comprehensive framework, accompanied by technical standards, by January 2024.
This initiative has received robust backing from various financial institutions, fintech companies, and other stakeholders, underscoring a unified commitment to enhancing the security of the entire banking and fintech communities.
We understand the delicate balance between safeguarding against fraudulent activities and respecting the privacy and regulatory frameworks that govern our industry.
Uzoma Dozie FintechNGR CEO’s Committee Chairman.
Chairman of the CEO’s Committee, Uzoma Dozie, said “We understand the delicate balance between safeguarding against fraudulent activities and respecting the privacy and regulatory frameworks that govern our industry. It’s not a trivial challenge, and the implications of missteps are significant.
He further stated “Following extensive consultations, the Committee is delighted to announce the identification of a robust framework for fraud reporting and risk mitigation. This innovative approach addresses the foundational issue of thwarting malicious actors without compromising privacy and regulatory compliance.”
