April 27, 2023

Expert calls for stakeholders approach to combat digital fraud

Expert calls for stakeholders approach to combat digital fraud

By Miftaudeen Raji

An expert in the FinTech and CyberSecurity industry, Olaniyi Toluwalope, has called for a stakeholders approach in the quest to curb digital frauds and cyber crimes. 

Toluwalope, MD/CEO, eTRANZACT Int’l Plc, made this call while giving a presentation at the annual FinTech CyberSecurity & Fraud Summit 2023, organised by Economic Forum Series (EFS) in strategic partnership with Vanguard Newspapers and the Central Bank of Nigeria, CBN on Thursday at the Civic Centre, Ozumba Mbadiwe, Victoria Island, Lagos.

He noted that the sad reality is that fraud has escalated as digital adoption has increased.

He said, “The situation demands a stakeholders’ approach to collaborate and combat this menace hands-on so that we can simultaneously combat fraud and provide customers with a seamless digital experience.

According to him, the immense growth of the fintech ecosystem is a welcome development, but it also comes with its attendant challenges in securing the entire payments processing ecosystem.

He stated, “The global payments revenues reached $2.2 trillion in 2022. And in contrast, in a recent survey, the volume of loss to fraud stands at $42 billion.

“During the past decade, individuals and e-commerce merchants have increasingly adopted payments services. About half the recent growth has been in consumer-to-business and business-to-consumer payments. 

“In Africa, electronic payments are expanding very fast, almost at twice the GDP growth rates of most countries in Africa.

“The explosion in the number of electronic transactions is part of the e­commerce booms and the shift away from cash payments. 

“Digital payment mechanisms include cards and other payment innovations, such as digital wallets. This shift to digital payments is expected to continue, as the last-mile customer continues to engage digital payment platforms,” he said. 

The issues

Expressed worry, saying on how long will this ‘boom’ continue without experiencing wholesale targeted fraudulent activities and cybercrimes.

He said, “As new fraud patterns within the ecosystem. Truth be told, fraud has been around since the very origin of e-commerce. However, the boom in online sales and purchases resulting from the COVID-19 crisis offered fraudsters a new window of opportunity.

“There will be a rise in Omni channel commerce – Broader attack surface for fraudsters.

There will be an increase in friendly fraud in response to rising inflation. There are also sophisticated and technologically advanced attack vectors employed by fraudsters.

How fraud, cybercrime impact consumer experience

Speaking on impact of fraud and cyber crime on customer experience, he noted that fraud, not only, affect the merchant, but buyers are also victims of these activities. 

He said, “In recent times, the overall proportion of victims of online shopping scams who lost money has reached, at least, 70 percent. This impacts greatly the reputation of merchants and affects the confidence consumers place in them. 

Tackling fraud menace

On how to tackle fraud and cyber crimes headlong, Toluwalope called for a better and robust cybersecurity policy framework. 

“It hearty to note that the regulatory bodies are already putting this in place. The framework provides a risk-based approach to cybersecurity risk. 

“Implement an active Fraud monitoring system – Identity verification, device fingerprinting and digital footprint analysis – and IP fraud analysis, behaviour and velocity checks. These should be industry-wide practices. 

“Check and validate Identity regularly – Update information and get customer consent through alternate channels every time payment is to be carried out,” he said.