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History and where the beauty of digital banking stops for customers

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By Sonny Aragba-Akpore

Despite the beauty associated with the advent of digital banking, the pitfalls are unbearable to victims.
From about 1987, when banks introduced technology into their banking operations, it was received with excitement by Nigerians who saw this as prayer answered.

Their reasons were practically understandable especially coming from the drudgery of “tally number“, a common experience in the days of analogue banking when customers had to wait in long queues for cashiers to leaf through dust-caked ledgers to fish out account holders details and balances before they could be paid.

Automatic Teller Machines (ATMs) were not readily available  until 1989 when National Cash Register (NCR) West Africa Limited carried out a pilot phase for Societe General Bank,(now defunct ) which was the pioneer in ATM services.It was closely followed by First Bank Nigeria PLC in 1990.

Before then, customers were limited to banking halls dogged by long hours wait to pick their money.
Painful as the experiences were, life had to go on.

Then the banks began the electronic banking (e-banking) processes to herald new experiences especially for ease of transactions through digital means.

Post Structural Adjustment Programme (SAP) era was when Technology began to make meaningful inroads into the banking sector even when the conservatives had their own misgivings/reservations and held back, not accepting it immediately. But Nigeria must creep away from the outskirts of globalisation and the banks and financial institutions manifested this early enough.

And the entry of Global System of Mobile Communications (GSM) in 2001 changed many things as the platforms brought together what was unimaginable and added meaning to just everything available and the banking industry dived into technology acquisition with frenzy, gripping it with every conceivable might.

At some point, it appeared, the banks were in a long distance race in competition to see who introduces what and how it runs.
Know Your Customers (KYCs) became easier through proper documentation including biometrics, fingerprints, photos of customers and later, the Bank Verification Number (BVN) leading to complete integration of the banking systems.

From the comfort of the homes and offices, just everywhere there was telecommunications coverage, banking transactions are now possible, easy and smooth.
Internet banking has become very popular as many banks create platforms for that purpose since the internet is now available no matter the speed. Smart devices and computers in the homes and offices are now very important tools for digital banking.

Shortly after, the more robust and flexible Unstructured Supplementary Service Data (USSD) was introduced thus creating more flexible ways to banking as the customers smile at every successful transaction.
Whereever there is a network coverage by telecommunications operators and service providers, bank transactions are possible.
All a bank customer needs is the bank, a USSD code for his/ bank and pronto, transactions take place effortlessly.

With USSD, the banks and telecom companies have very strong bonds and handshakes at every point.

But that is where the beauty stops.
As time went  by, banks and bank customers have become victims of smart alecs or better put, ”yahoo boys “ or fraudsters, some of whom allegedly collaborate with insiders to defraud unsuspecting customers.

Eight banks lost nearly N2billion to scammers in 2021.Who bears the burden of these losses and how do the victims recover their moneys without any form of insurance cover?

A survey carried out by Agusto & Co in 2022 revealed that 59 per cent of bank customers sampled indicated that they have fallen victims to fraud.

The survey revealed that 41 per cent of this figure said their accounts hadn’t been compromised, “however, the remaining had been victims through phishing emails, data breaches, unauthorised access to accounts through USSD, and others.”

The report tagged ‘2022 Consumer Digital Banking Satisfaction Index’ specifically called for investment in cyber security and awareness to avert bank customers falling victim to breaches in their accounts.

Data by the Nigeria Inter-Bank Settlement System Plc (NIBSS) shows that fraud attempts via mobile channels saw a 330 percent increase year-on-year (YoY) between 2019 and 2020, while attempts via web and POS channels saw a 173 percent and 215 percent increase YoY. In those nine months, nine out of every ten attempts were successful, and there were 46,126 of such attacks.

Only recently a Lagos State resident and former Zenith Bank employee, Chiamaka Agim lamented how over N4 million strangely disappeared from her Zenith Bank account.

The lady narrated her ordeal in a video uploaded on her Twitter page on Tuesday, January 10, 2023.

She stated that she was relaxing in her apartment on the evening of January 9, 2023, when she received three alerts for debits which added up to N4.039 million.

She also said she opened the bank account that was cleared of all her savings while she was working at Zenith Bank.

She was quoted as saying “when I received the first alert around 8.25 p.m  I actually thought it was a WhatsApp message. I checked it and was shocked to see that it was an alert of N3.715 million,” she said.

Fraud and unauthorised debit on customers accounts among Nigerian banks are seemingly on the surge but the frustrating aspect is the attitude of banks when responding to such incidents.

Miss Agim’s case is particularly pathetic as her case brings to the fore flaws in the system after she was debited N4.039 million in a single day without initiating any transaction.

“Unauthorised transactions were done last night at about 8:40pm on my Account and everything is gone, over 4 million naira debited. And @ZenithBank is not saying anything serious. This is my life savings. Please I need legal help,” she lamented on micro-blogging site Twitter.

Curiously, she claimed that her debit limit was N200,000 and wondered “how they (the bank) authorised a N4m transaction.”

If her debit limit is N200,000 as she claimed, at what point did the bank authorise payment without her consent? Analysts fear that there may have been insiders abuse in this regard as certain loopholes may have been noticed and taken into consideration before suspected fraudulent movements of the money took place.

In her efforts to recover her money she visited two Zenith Bank branches (at Herbert Macaulay and branch in Alagomeji, Yaba) in Lagos and wrote two separate letters of complaints.

It took public spirited intervention before respite came her way as it was revealed that the bank had responded positively to Miss Agim.

Her case is one of several cases reported, as many victims like hers have resigned to fate but unlike her, these cictims remain as the name implies, “victims “.

There are many victims languishing and some took the option of suicide since life made no meaning to them after the losses due to no fault of theirs and many have no fallback conditions for redress the situation as the case may be.That is a bigger tragedy.

▪︎ Aragba-Akpore, an analyst of telecoms trends, contributed this from Abuja

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