Digital financial crime skyrockets in Nigeria, fund recovery difficult

By Seun Johnson
With the exponential growth of digital payment market globally, the rate at which customers are losing their monies to cyber criminals has become a serious source of concern.
According to a new report released by Palmpay, a Nigerian-based fintech company, it is observed that only 33% of customers whose monies are stolen make a report or take appropriate steps that will lead to the recovery of their money, while the remaining 67 percent who failed to act in good time end up losing their funds.
The statement, which revealed that failure to report any fraudulent transaction early enough affords criminals the privilege to move stolen money to safe destinations, however, cautioned users on the platform to be extra-vigilant as criminals can easily spot and exploit different vulnerabilities once they discover any loophole.
Giving insights into what the company is doing to guarantee confidence in their service, the statement highlighted three approaches adopted to securing users’ transactions.
“The first is through its device security features which essentially require that users provide OTP and PIN when accessing their app from another device. It allows users to set a time limit for inactivity before entering a PIN. It also requires a fingerprint or facial recognition login. In cases of telecom fraud where OTP/PIN might have been compromised, the system can use facial recognition to confirm the user’s identity.
“The second approach is the risk management strategy which is aimed at helping users avoid financial losses, reduce the disturbance to users, and balance security and user experience. The strategy makes use of algorithms, big data, and computing power as the framework.
“The final approach is the PalmPay closed-loop risk management. This deals in more detail with the various stages of fraud detection and provides mitigation of the risk.”
As the market continues to grow, cyber criminals are said to be constantly widening their fraudulent horizons and devising means of stealing funds from customers’ account. This fraudulent act is believed to have been bolstered by lack of security awareness and sometimes the greed of the victim.


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