Great feedback on the piece on how to fix our broken digital security regime in Nigeria. Let me also add that the playbook must not necessarily be anchored on technology alone. Yes, there must be a non-tech component which must be deployed to address some of these issues.
Good People, Nigeria should declare a financial state of emergency on “Cyberfraud, Identity Theft & Wire Fraud” in the nation. In the last three years, many fintech startups have failed, not because of market conditions, but because of this fraud vector.
I posit that we may even have to redesign the architecture of our financial and banking infrastructures. Look at OTP; it is a magnificent innovation which does reduce fraud. But note that OTP is mainly checking for access, and when you do not have full control of your data, as a user, OTP will bring surprises.
Today, in Nigeria, you can get any government data of any citizen, starting from a mere phone number. One site, reported by Paradigm Initiative Nigeria (PIN), claims: “We provide millions of our users reliable and quickest services to verify people’s identity using their NIN, BVN, International Passport, Driving License, Voter’s Card and do much more.” Simply, with one stolen or not ID, bad actors can download all your data, and can use that data, to recreate an identity for you. The illusion for most of these services is that the real owner has provided approval; that is not always the case.
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One of the biggest frauds in Nigeria a few months ago, which affected many startups, happened because they can now set up accounts of REAL companies by cloning the identities of their owners, and some banks will fail to detect them! You ask for a passport, they provide; BVN, they give; etc. (Solution: always use real-time automatic photo verification).
Nigerians do not have full control of their data as websites are morphing, selling and distributing our data. I expect ONLY the government to be the repository of my data and should prevent others from scrapping to commercialize access to it. Today, if someone calls you, you can use that number to pull information that person submitted when getting that SIM number. We must challenge that. I commend PIN for leading that charge.
Finally, when was the last time you collected N100,000 from a POS agent and the amount was complete? What are we doing to ensure that cheating is stopped in that sector? In the old banking days, an Inspection unit would have taken those bad actors out within weeks.
Can EFCC help by having a task force to fish out those bad actors as the old banking Inspectorate Unit used to do it? Nigerians are losing money on this selling and buying Naira business called agency banking through this fraud vector. We must stop it! We do not need to import tech for that. Yes, someone must get annoyed and save the common citizens.
Naira became a “commodity” when Nigeria scaled POS agency banking. When that happened, the Naira, among other features, became a “product” or “service” which could be purchased and resold for “gain”. That is not new since we exchange US dollars for Naira and vice versa, but in this case, you are exchanging digital Naira for cash, and vice versa, within the context of the same currency. Endogenously, it means there are many frictions in the availability, velocity and transmissibility of Naira for POS agents to have imposed a fee to fix them.
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We have too many crack heads in leadership positions, and also emotionally unstable citizens on the other side. This combo is very dangerous and ruinous. Who does the thinking for our managers that come up with these crazy ideas? At least Nigeria has people who can still think correctly, many of the things we read or hear are way too below our standard, at least for some of us.
If a bank or immigration service needs access to NIN of an individual, the authorisation should be such that it can only be accessed from a registered IP, tied to a particular device. What this means is that the bank or immigration officer with clearance cannot access the NIN link from any other device within the same building. When you have only three or four IP with such security clearance across institutions and agencies, any foul play can easily be detected. We cannot be this sloppy and porous, it is too embarrassing. Everything cannot be up for buying and selling.
Again, the naira redesign of early 2023 solved a very important problem in this country: huge ransom payment for kidnapping. Instead of building on that framework, we used hysteria, politics and emotional instability to kill what was working. The level of incompetence can be dizzying.