Leading South African biometric identification technology company Nirph is revolutionising banking operations in Nigeria. Their unique CIS development is eliminating customer identity fraud within banks that have implemented the system, and has the potential to eradicate fraud within the entire banking sector.

 

 

On Nirph South Africa

 

Nirph is a trusted provider of advanced enterprise technology including products, systems and solutions that protect and secure personal identities and assets. They provide the full product range required for solving problems associated with identity management. This forms the foundation of building convenient and secure identification (ID) solutions.

 

Nirph develops innovative, biometric solutions (fingerprint recognition) that enable its clients to reliably and accurately identify their customers.

 

The company specialises in identity solutions for various institutions including financial, healthcare, judiciary, pension, government and other private sector industries where customer identification or employee identification is required.

 

Companies and governments rely on Nirph to provide a clear vision and strategy for the future of their customer identification and verification which cannot be repudiated.

 

(Source: Nirph’s official website)

 

 

 

 

On NAJCOM Technologies Limited, the first value-added reseller of Nirph CIS Solution in Nigeria

 

NAJCOM Technologies is a Nigerian company with years of experience in the industry as electronic security providers.

 

In view of the high level of insecurity in Nigeria, particularly in Lagos, there is an urgent need to provide measures to protect the identity of persons from identity theft and providing confidence when engaging in normal business transactions.

 

Consequently, NAJCOM offers clients access to technologies that will protect persons from identity theft and transaction fraud and hence decisively reduce company and individual risk resulting in the reduction of criminal activities within their companies, the industry at large, and within the state.

(Source: Company’s official website)

 

Investadvocate in its usual manner sought to find out more about the Nirph Customer Identification System Solution (CIS). An innovation from South Africa, Nirph CIS has been introduced into the Nigerian banking system, other financial institutions, companies and government agencies to help checkmate fraud through biometrics.

 

In this interview with PETER OBIORA of Investadvocate, Niyi Ajetomobi, Managing Director/Chief Executive Officer (MD/CEO) of NAJCOM Technologies Limited describes how the solution works and its benefits to the Nigerian banks especially, as well as to government agencies.  NAJCOM is the first certified value-added reseller of the CIS solution in Nigeria and other parts of the West African sub-region.Excerpt:

 

Your new Nirph Customer Identification System (CIS)

 

Nirph CIS is a relatively new innovation to be introduced to Nigeria. NAJCOM was the first reseller and has recently been upgraded to be the first certified value-added reseller in Nigeria and the rest of West Africa. The Customer Identification System (CIS) is a biometric solution to the extensive fraud that takes place in the banking and financial sectors, as well as in government agencies in Nigeria and worldwide.

 

The CIS solution entails a fairly simple process: bank customers are enrolled at their various branches with the system capturing their telephone numbers, signatures, photographs and fingerprints electronically.

 

 

To achieve this, four of an individual’s fingers must be scanned, and the fingerprints electronically attached to the customer’s account. Once this is done, the customer can go to any of the branch of their particular bank to perform transactions without identity cards, passbooks, cheques or any other form of paper-based identification. Once enrolled, any of the fingers can be scanned to verify the true identity of the client. In order to increase security, the telephone number of the client will also be requested to complete verification.

 

 

For Nigerian banks to take advantage of CIS and improve on their service delivery, all their existing- and new customers would be enrolled on to CIS.

 

 

When a customer goes to transact at a different branch there is no need for the person’s identity to be verified by the branch where the account has been opened. Individuals are identified instantly and effortlessly.

 

 

As a customer of the bank with the CIS solution you will be required to go to the bank to provide your identity, preventing anyone to impersonate me. In the event of allowing a third party to transact on an individual’s behalf, the Accountholder will introduce that person to his or her Account Manager for enrolment in the bank; and if the person no longer do business with the Accountholder, it is pertinent to  notify the bank to remove the person’s information from the account.

 

 

CIS has the capability of integrating into existing banking applications which allows bank personnel to use existing data to complete the enrolment process.

 

 

As the bank’s customer base grows so can the CIS. Also, as the need arises to attend to more customers, the bank can add more application servers to deal with their requirements.

 

 

In addition, every organisation has a data base of all their employees, to take advantage of this solution, this data base of the staff members would be furnished to us, which we would in turn incorporate into the CIS data base with their names and date of birth.

 

 

Organisations such as pension funds are now able to verify their beneficiaries in a non repudiated manner, this saves funds that would otherwise have been stolen by ghost beneficiaries’.

 

 

This system also prevents clearing forged cheques if every bank were to make use of this solution. Forged cheques can easily be detected by the CIS solution. Like I earlier affirmed; it is a fantastic solution that reduces fraud to its lowest minimum in the banking and financial environments.

 

 

Rate of Automated Teller Machine (ATM) Fraud

 

 

 

ATM fraud is a daily occurrence in Nigeria. Conclusive research is yet to be done in Nigeria, but Bloomberg in a September 2009 report confirmed that ATM fraud alone impacted more than 42 percent (42%) of Dubai banking customers in the United Arab Emirate (UAE).

 

ATM fraud is frustrating simple to administer, yet luckily just as easy to prevent with Nirph CIS. Unsuspecting customers will go to an ATM and unknowingly reveal their Personal Identification Number (PIN) to hackers who seize such opportunities to defraud them. But if the Nirph CIS solution is applied to the ATM technology, it will be impossible for fraudsters to hack other people’s PINs – simply because there will be no need for PINs. The unique properties of fingerprints will ensure that this type of fraud is eliminated.

 

 

Using fingerprints as second-level authentication not only increases security, but is also cost-effective as fingerprint usage will replace cards.

 

 

It is pertinent to note that we are aware that banks will probably not immediately replace their ATMs when they embrace the CIS solution. Instead, we would work in collaboration with their ATM vendors, and all we are required to do is to install our biometric device into the machines.

 

 

Therefore a customer that has been enrolled on the bank’s CIS system can go to any of the ATMs and withdraw money without cards. This is a second level authentication and it is optional; if you are a customer you may decide not to use the ATM card or only your fingerprint.

 

EDITOR’S PICK:

 

“Most Nigerians who distanced themselves from the e-transacts window – especially from the ATMs – said that the innovative machines had become avenues for fraud.

Mr. Ikechukwu Oranu, one of the victims of the increasing ATM fraud, said that fear of losing all his wealth through automated-driven scams has challenged him to close his accounts in two commercial banks.

Oranu, a second-hand vehicle dealer based in Lagos, said that he lost N400, 000 in two separate incidents where unknown people accessed his accounts in the two banks.

The fraudsters, according to the businessman, removed via ATM N100, 000 and N300, 000 respectively from two commercial banks in a manner that has perpetually given him sleepless nights about the safety of his deposit in banks.

“I am done with ATMs. I don’t think that they have enough securities that protect people’s deposit, hence, my decision to drop the facility,” Oranu said.

Oranu, who said that his banks are still studying and investigating the circumstances which led to ATM fraud, also lamented “the long time it has taken them do this”.

(Source: Daily Trust July 03 2009)

 

Individuals and different bank accounts

 

 

If an individual is operating with different banks, the CIS solution requires that the account holder enrols at all the different banks.  Additionally, a person that has several accounts with one particular bank cannot enrol in different branches of the bank; but must do so in one particular branch. Customers must enrol in all the different banks that they operate accounts.

 

 

Other alternatives to fraud detection

 

 

Our experience in the banking industry has shown us that banks have applied countless measures in the attempt to eliminate fraud, but these measures are manually operated, slow, and laborious – and the reality is that the world is currently moving to biometrics. This is not only true for the banking sector. Even many embassies and passport systems such as the current Economic Community of West African States (ECOWAS) passport issued in the Nigeria require biometric systems.

 

 

CIS solutions in other areas

 

 

Apart from banks and other financial institutions, we also aim to introduce this solution to the government agencies, ministries and parastatals to help keep financial fraud in check. One increasingly relevant issue is that of ghost workers in Nigeria. The Nirph CIS can eliminate the problem of ghost workers – people being paid without working. Another area we intend to explore is to help ensure that original pensioners are the only ones to benefit from government largesse. Some of these pensioners have passed away; but fraudulent individuals continue to exploit pension payouts; which is essentially an act of economic sabotage.

 

 

In order for the CIS to eliminate this problem, every organisation would furnish their database of employees to us, which we would in turn incorporate into the CIS database with their names and date of birth. Thus, anyone claiming to be a pensioner can be checked against the details captured on the server.

 

 

On Automatic Fingerprint Identification (AFIS)

 

The Automatic Fingerprint Identification System (AFIS) is a technical aspect of the CIS solution that works with the CIS server. This will help the government with regards to pensioners: all pensioner data would be integrated into the CIS solution. We will introduce this by enrolling government workers into the CIS solution. Subsequently payment will be easy and devoid of fraud.  People can only enrol onto the system once – any attempt at additional enrolment would be detected by the system.

 

 

CIS anti-fraud database for easy identification of fraudsters

 

 

We believe that with time, the Central Bank of Nigeria (CBN) will mandate all the Banks to adopt the CIS solutions. This will be done in such a way that if a fake cheque is taken to any bank, the bank will identify it as fraudulent. This will be possible if all banks make use of the CIS solution.

 

EDITOR’S PICK:

“Banks and consumers lose several millions of Naira to fraudsters on a daily basis as a result of financial transactions carried out through electronic systems.  Perhaps even more concerning, consumers are losing confidence in the security of the banks’ electronic channels including ATMs, point-of-sales and eCommerce in general.

 

The menace of ATM fraudsters will not abate, but will continue to hound the nation’s banking sector unless there is a concerted effort by banks, law enforcement agencies and financial crime investigators/prosecutors to fight the challenge.  Research has shown that both the chip and the magnetic stripe cards are vulnerable to attacks.

It is further disheartening to note that ATM Frauds have been successful due to support and collaboration provided by unscrupulous INTERNAL employees. It is equally not certain our police and other financial crime investigators have what it takes to check the challenges as regards carrying out an effective and conclusive investigation to nail the culprits. This means that, for a long time, these unbudgeted losses by the customers/banks will continue while the banks are suffering reputational losses.

 

In order to put a stop to the hydra-headed challenges, it has become very imperative for ATM Deployers, Systems Auditors, Internal Auditors/Controllers, Legal Teams, and Operational Risk Managers to acquire knowledge and skills on how to prevent, detect and investigate all forms of ATM/eChannel Frauds”.

 

(Source: Mr. Douglas F. Russell, the Director, DFR Risk Management Limited, United Kingdom on ATMsecurity.com website)

 

CIS in the other parts of the world

 

 

The Nirph CIS solution has been installed in selected locations worldwide such as Uganda, in Miami, Florida (US), as well as Dubai (UAE), and is quickly gaining prominence and patronage in other places.

 

On third party transaction with the CIS solution

 

 

Like I affirmed earlier, Account holders are required to go to the bank with the third party for enrolment onto the bank customer’s account in order to enable the third party to transact on the account holder’s behalf. For a third person transaction, an instruction will be issued to the bank. Enrolment for a third party is once-off; all the account holder requires is to notify the bank of a new third party transaction.

 

 

This is useful for companies that are operating corporate accounts because the signatories to the account must appear at the bank for enrolment.

 

 

Installation and maintenance of the CIS solution

 

 

Installation of the CIS solution takes, at most, four weeks. The bank provides the servers and we are responsible for the installation. Once the bank goes live on the CIS solution, as a certified value-added reseller, we have been trained to provide technical support to all the customers. It is the sole responsibility given to NAJCOM that wherever the CIS solution is embraced, we should be able to support them technically and this we are ready to do. Additionally, we will train the users of this solution within a week.

 

 

How many Nigerian Banks have taken advantage of the CIS solution?

 

 

One of Nigeria’s first generation Banks will be unveiling the solution soon. They are testing the solution at the moment, but have not rolled it out in full across all their branches. Also, we have introduced the CIS to all the other banks in Nigeria and we have been called in by some of them to do our presentation.

 

 

CIS Integration

 

 

Upon opening a new account with the bank, the customer will enrol on CIS and submit their Know Your Customer (KYC) details. The KYC details is scanned into the system and linked to the customer’s profile. Authorised CIS users will then fill in the customer’s details or populate the information from the bank’s banking application.

 

 

Benefits of the complete CIS solution

 

 

The Nirph CIS solution is revolutionary both in concept and in practice. It will greatly reduce paper usage, which not only reduces administration and storage pace, but also cuts costs. Secondly, it will eliminate fraud in the system. Also, the customers of the banks will be easily identified: Know Your Customer (KYC).

 

 

I have earlier mentioned this, going to the bank with passbooks, cheques and other paper-based identification and transaction requirements will be a thing of the past. Customers can operate their accounts anytime they wish to do so.  Additionally, people will no longer be required to know their PINs or be defrauded by through their PIN. All that is required for a transaction to take place is for the customer to place their finger on the scanner and the ATM will identify and pay them.

 

 

This is a form of strong authentication, if you are not the account holder, there is no way you can operate that account. This also eliminates fraudulent card schemes and removes the cost of renewing ATM cards. A card may be forgotten at home, and a PIN may be stolen or forgotten; but your fingerprint is always with you – it is unique, and it is yours.

 

 

Advice for banks on the CIS

 

 

We aim to appeal to all the banks in Nigeria to embrace the CIS solution in their operations so as to eliminate fraud in the entire banking system in the country. If banks are operating the CIS solution like I affirmed earlier, they will know their customers. For instance, as the NAJCOM CEO, I don’t go to the Bank, they only know my signature; but not my person. But with the CIS solution, I will be forced to go to the Bank as the signatory to NAJCOM account. And for the third party, I will also be forced to introduce our Account Manager to the Bank for enrolment and if the individual is no longer working with us, I will notify the Bank to remove his information from the Account.

 

 

CIS in other parts of the West African sub-region

 

 

At this period, we want to start by expanding the market in Nigeria. I am a Nigerian and will want the good things to start from home before I extend it to other parts of West Africa. Once this is implemented in Nigeria, our next target will be Ghana, Togo, Cote d’Ivoire and other parts of the region.

 

End