The umbrella body of fintech players in the country, the Fintech Association of Nigeria (FintechNGR) has unveiled plans to address the spate of fraud on digital payment channels through a framework for fraud reporting that will be released in 2024.
The CEO’s Committee of the Association disclosed this in a statement released in Lagos. The Committee highlighted the gravity of the situation, emphasizing that failure to address these challenges could jeopardize the entire digital ecosystem that has garnered international recognition.
According to the Committee, the framework is aimed at combating fraud while respecting the privacy and regulatory concerns surrounding data centralization and reporting.
The statement quoted the Chairman of the CEO’s Committee, Uzoma Dozie, as saying:
“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.
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“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.”
FintechNGR plans to release the comprehensive framework along with its technical standards by January 2024.
This initiative has garnered strong support from numerous financial institutions, fintech companies, and other related parties demonstrating a collective commitment to fortifying the security of the entire banking and fintech communities.
Recently three Nigerian fintechs lost over N5 billion to hackers in the first 8 months of this year as cases of hacks and frauds increased within the ecosystem.
While there are many more incidents involving undisclosed amounts running into billions, it was gathered that the situation is getting more complicated as some of the heists had members of staff of the fintechs involved.
According to different sources in the industry, this has now become a major challenge for the fintech companies in Nigeria.
More worrisome for the fintechs is the fact that an attack could also come through another connected fintech, hence, a well-secured platform could get compromised through another connected platform with poor cyber security systems.
This fear recently prompted a commercial bank to disconnect many fintechs from its platform, which made it impossible for its customers to send money to the affected fintechs, although the issue was later resolved.