Fintech negligence causing fraud among unbanked, middle class – EFCC

Fintech negligence causing fraud among unbanked, middle class – EFCC

The Economic and Financial Crimes Commission (EFCC) has raised concerns about increasing fraudulent activities in Nigeria’s financial sector, particularly within the unbanked, under-served, and middle-class populations.

This was disclosed in a statement by the EFCC, Ola Olukoyede, the EFCC Chairman, highlighted these concerns during a recent engagement with stakeholders in Abuja.

He attributed this trend to negligence by some fintech companies in implementing robust Know Your Customer (KYC) protocols.

Olukoyede noted that many fintech firms fail to adhere to strict KYC guidelines, particularly when onboarding customers for tier-one accounts. He highlighted that this negligence creates vulnerabilities that fraudsters exploit.

“Olukoyede observed that there was a high level of poor internal control by fintechs at the level of the unbanked, the under-served and the middle-class population spectrum,” the statement read. 

” There’s quite a whole lot of fraud that goes around that particular level, so the issue of KYC (Know Your Customer) is very important, especially because of the issue of how fintechs open tier-one accounts, sometimes without attention to KYC. And people take advantage of this and are quick to commit fraud through this negligence,” Olukoyede stated. 

The EFCC chairman stressed the importance of fintech companies revisiting their onboarding processes to prevent loopholes that fraudsters exploit.

Collaboration with EFCC

Highlighting the role of fintech firms in combating fraud, Olukoyede called for increased cooperation between fintech operators and the EFCC.

READ ALSO:

• I have no regrets over construction of judges’ quarters — Wike
• Bauchi couple cancels wedding 7 days to ceremony over genotype
• Cameroon detains Nigerian pastors over kidnapping

He emphasized that companies must see themselves as stakeholders in the fight against corruption and respond promptly to regulatory requests.

“Increasing your level of collaboration with the EFCC would mean seeing yourselves as stakeholders in the fight against corruption. We would like you to respond to us when we make inquiries and requests,” he stated. 

The EFCC expressed its willingness to partner with Moniepoint in addressing fraud-related challenges, emphasizing the importance of collaboration in combating financial crimes.

 “On our part, we are open to whatever it is that you want us to do. We value it that you are here today to seek a stronger tie and collaboration.

“When we have stakeholders come in and want to be part of what we are doing, majorly stakeholders like you, it gives us joy because we know that no one man can fight corruption alone. The collaboration you seek tells us that you want to strengthen your system; you want to be able to create more internal controls.

“You want to be able to put in place things that will mitigate those weaknesses that will lead to fraud within your system, that’s what we do. Our core mandate is the enforcement and investigation of economic and financial crimes. So, we’re glad and wish to collaborate with you,” he stated.

 

Fintech negligence causing fraud among unbanked, middle class – EFCC