The Economic and Financial Crimes Commission (EFCC) has expressed concerns over the growing trend of fraudulent activities in Nigeria’s financial sector, especially among the unbanked, underserved, and middle-class populations.
The concern was raised by the EFCC Chairman, Ola Olukoyede, during a recent stakeholder meeting in Abuja, where he emphasized the link between lax Know Your Customer (KYC) protocols by fintech firms and rising fraud.
Olukoyede noted that many fintech companies fail to implement robust KYC measures, particularly for tier-one account holders, leaving loopholes that fraudsters exploit. He described the internal controls within these firms as inadequate, allowing fraudulent activities to flourish. “The issue of KYC is very important because of how fintechs open tier-one accounts, sometimes without proper attention to KYC. This negligence provides an opportunity for fraudsters,” he stated.
To curb these issues, the EFCC called on fintech firms to collaborate more closely with regulatory agencies. Olukoyede urged operators to view themselves as stakeholders in the fight against financial crimes, responding promptly to inquiries and working proactively to strengthen their systems. “We value collaboration with stakeholders like you because no single entity can tackle corruption alone,” he remarked, reiterating the EFCC’s commitment to supporting companies that prioritize fraud prevention.
The EFCC also highlighted its willingness to work with organizations such as Moniepoint to address fraud-related challenges, noting that such partnerships could help mitigate weaknesses in the financial system. The agency emphasized that effective internal controls and robust onboarding processes are critical to curbing fraud in the sector.
Reports by the Financial Institutions Training Centre (FITC) revealed alarming figures, showing that Nigerian banks lost a staggering N42.6 billion to fraud between April and June 2024, a significant increase from previous years.