There is no disputing the fact that Fintechs have opened a new market for improvement in financial payments and transactions, however, the industry is currently ravaged by the rising attack of cybercriminals who exploit companies systems to steal consumers’ funds.
In Nigeria, fintechs are experiencing significant financial losses due to hacking incidents. A recent report on Nairametrics revealed that Nigerian fintechs suffered over N5 billion in losses to hackers year-to-date (YTD) in 2023.
The report further reveals that insider connivance, involving employees of Fintech companies, is suspected in most of the cases, making it challenging for these companies to secure their systems effectively.
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According to different sources in the industry, this trend has become a major challenge for fintech companies in Nigeria. In another case of insider fraud fingered in Patricia’s N2 billion losses, facts have emerged that the stolen funds had the hands of a few insiders who perpetrated such a dastardly act.
Also, just recently, it was reported that Nigerian payments giant Interswitch is currently grappling with the loss of N30 billion to chargeback fraud, with the incident directly linked to a few former and current Interswitch employees who likely exploited vulnerabilities in the company’s system.
With all these incessant insider fraud cases occurring across several Fintech companies in Nigeria, it is a call to action for these companies to exercise thorough scrutiny when hiring employees.
Fintech companies should be intentional with their hiring process, by placing a high premium on thoroughly scrutinizing job applicants before offering them employment. This vetting process involves comprehensive background checks, reference verifications, assessments of an individual’s integrity and trustworthiness, amongst others.
While these processes might not entirely eradicate fraudulent activities, a thorough hiring and vetting process can mitigate the risk of hiring individuals with malicious intentions. It can also deter potential wrongdoers and ensure that the workforce is comprised of trustworthy professionals.
Beyond initial vetting, fintech companies should also consider implementing ongoing monitoring and security protocols to detect and prevent insider fraud as employees’ circumstances or motivations can change over time.
By carefully scrutinizing potential employees and implementing thorough security measures, fintech companies can eradicate and mitigate financial losses, and also prevent incidents that can bring damage to a company’s reputation.
Following a similar pattern with Fintechs, data released by the FITC revealed that most frauds in the banks also have the involvement of insiders.
In (Q2) of 2023, the FITC reported that there was a 20.54% increase in insider involvement in the frauds committed across the bank in the second quarter of the year.
Considering the increasing instances of employees engaging in fraudulent activities, banks have been advised to exercise heightened vigilance when hiring new staff or contracting outsourcing firms for employment purposes.
To prevent staff involvement in fraudulent behavior, the FITC recommended the acknowledgment and offering of rewards to employees who have demonstrated exceptional integrity in situations where they could have acted otherwise.