CBN tasks bank directors on e-fraud

CBN tasks bank directors on e-fraud


…calls for checkmating banking activities

The Central Bank of Nigeria has called on directors of commercial banks to get involved in the management of all activities in their banks.
CBN’s Deputy Governor, Financial System Stability, Mr. Joseph Nnanna, who spoke at a 5-day training program, organised for bank directors on corporate governance and anti-money laundering in Lagos recently, said the apex bank would be happy to see a pro-active board of directors that can checkmate fraudulent activities in the day to day management of the banks.
He warned that the apex bank does not want to be in the grey list of the Financial Action Task Force, adding that the directors must keep abreast with global trends, as the issue of corporate governance has become topical issue globally, especially when its role during the 2008 global financial crisis and its implications for the stability of the Nigerian economy is considered.
Nnanna noted that there are lots of fraudulent activities going on in the banking industry, and that bank directors must keep close watch and scrutinise every activities both at the lower and management level.
“We want you to tell your compliance officers to do their work with all the seriousness it deserves. If they come and find any bank wanting, it is not only the CEOs of those banks that will be held responsible. We shall hold the board collectively responsible,” he said.
According to him, there is an interface between weak corporate governance and money laundering/terrorism financing that may not be very obvious to the ordinary observer. He stressed that the two could be considered as mutually reinforcing, since weak corporate governance can become compromised by vendors of money laundering and terrorism financing and vice versa.
He said the issue of corporate governance is made more urgent now than it used to be, adding, “It is obvious that banks’ financial performance, reputation and the safety and soundness of the financial system must be driven by strong corporate governance culture. I have no doubt in my mind that this is where this training derives its most important objective and significance from.”

CBN does not want to be in the grey list of the Financial Ac tion Task Force. BANKS’ directors must keep abreast with global trends, as the issue of corporate governance has become topical issue

Meanwhile, The Economic and Financial Crimes Commission has accused commercial banks of lackadaisical attitudes towards curbing the activities of fraudsters in banks.
Deputy Chief Detective Superintendent, Ibrahim Shazali, while speaking with financial journalists recently in Ilorin, Kwara State, said banks should be able to monitor and take genuine information and data of any one that comes to open an account in the banks.
Ibrahim said lack of adequate legislative support, poor corporate governance, and underdeveloped information technology infrastructure also serve as deterrent to successful investigation of electronic transactions in Nigeria.
He explained that as at 2014, the Nigeria Interbank Settlement System reported that point of sales, ATMs, and mobile banking are the major avenues by which cyber criminals operate in the country, noting that it has finally dawned on global financial and business leaders that cybercrime is not merely a technology issue but is, at the heart of it, a strategic one which can only be successfully minimised by careful consideration of current electronic transaction processes, supervision, awareness dissemination, and delegation.
“For the fight against electronic attacks to be effective, it is necessary to determine where exactly we need to focus our energies. In other words, it is not enough to have the tools to fight the problem, we must also know where and how to use them,” he said.
The EFCC operative added that cybercrime is especially devastating, because many times, victims are completely unaware of the fact that they are being targeted, and they do not only lose money, but also sensitive customers and organisational data.
Warning that Nigerian banks must not only focus their energies on developing attractive electronic financial products for their clients, but must also simultaneously devise methods of ensuring the highest possible security and protection from attacks, Shazali said, “Banks must ensure that their in-house ‘know your customer’ procedures and processes are consistent across all their different platforms to ensure uniformity of information and allow for easier detection of identity duplication and or theft and possible fraudulent activities by customers. The Bank Verification Number initiative by the CBN is particularly encouraging in this regard.”
Shazali also noted that the prevalence of electronic crimes has many devastating consequences on the banking industry and the economy as a whole, among which are: disruption of business processes, loss of reputation and trust, reduction in employee morale, and deterioration of relationships between banks and regulators.