Nirph ID Solution: Nigerian Banks to save billions of Naira on identity fraud


“Leading South African biometric identification technology company Nirph Digital (Pty) Limited is revolutionising banking operations in Nigeria. Their unique Customer Identification System Solution (CIS) development is intended to eliminate customer identity fraud within banks that have implemented the system, and has the potential to eradicate fraud within the entire banking sector, pension, government and other private sector industries.






“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)





As a follow up to the interview published on the Investadvocate website September 09 2010 on the CIS Solution.  PETER OBIORA, Online Editor met with Theunis Botha, Chief Executive Officer (CEO) of Nirph South Africa during his recent visit to Nigeria to find out more about the Nirph CIS an innovation seeking to make its way into the Nigerian banking system, other financial institutions, companies and government agencies to help checkmate fraud through biometrics.Excerpts:




Who is Theunis Botha?



Theunis Botha is an average person from an average family in South Africa. I have always being in the Information Technology (IT) Industry; specifically focused on biometrics and fingerprints recognition. We were lucky enough in South Africa; we have done some hotel installation of biometrics. The way this works is that when you arrive a hotel reception, you scan your fingerprint, go up to your room and do the same; then you are inside your room. This is where I come from; a corporate environment, we are three Entrepreneurs; who started Nirph in year 2003; I with Gustav Schoeman and Marius Bezuidenhout.




We believe there is a huge gap in the Market; specifically in Africa; people need to cover this gap; especially in the biometrics area. We decided to do something as to this regard, something that is inexpensive; but works well. Therefore, we came up with a world class solution for Africa and the rest of the world; the Nirph CIS, a unique and highly effective customer identification system. This system is deployed throughout the structures of a Bank and manages all customer identification within the Bank.



The secret behind the CIS Solution



One day, we were sitting in front of a friend, who works in one of the big Banks in South Africa; the Bank also is located everywhere in Zambia. This fellow came to us and complained that there are lots of fraud and there was every need for the Banks to identify their customers and those who do business them.



My Banker friend confirmed that a big problem in our Banking Industry is that there are no solutions for the identity system in the industry and other related areas. He lamented that the problem they were facing is a situation of one person, going to different branches of a Bank borrowing money or paying in cheques that are forged and defrauding the institution. This prompted us to look inwards and come up with the Customer Identification System (CIS). We eventually took the solution to the United States of America (USA). And I saw a few Banks applying the solution; if we can get it working somewhere; then others would follow.



Thereafter, when we came over to Nigeria, went to one of the Banks to transact business, we sat for a long period of time; trying to get identified; this is the perfect product that we have to bring into the Banking industry in Nigeria. Thus, we started knocking on the doors of Banks in Nigeria and eventually we got one of the biggest and old generation Banks that opened up to us to acquire the CIS Solution. And we hope that soon most of the Nigerian Banks will embrace the Solution.



What percentage of fraud has been recorded in the Nigerian Banking Industry?



We have not done our direct research, but we have been speaking to people and hearing what it is happening. I can affirm that the fraud in the Nigerian Banking sector is becoming like that of South Africa. In South Africa alone, identity fraud has reached an estimated half a billion Rand (500 million Rand) about N10 billion. There is hardly a person who is out there on the streets that has not being a victim of Automated Teller Machine (ATM) fraud in places like South Africa and Nigeria.



What we are trying to do is to put up a system that can eliminate or cut half of the fraud away, it will be beneficial to a country; with this some bigger banks will have the viability to lend more money; because funds would be saved as a result of not losing to fraud.



Also, customers will always like to move their funds to a Bank that has the biometrics system; because they know that their money will be protected and safe. This is all about creating a trust and keeping peoples money safe; that is where the Banks should move to; not trying to put up some solutions that will not help.



Fraud is everywhere in all Banking sectors, where there is money, there is fraud. But if we can try and cut down on it, it will be better for us.




“They steal an identity, take out a policy and then declare the person dead and claim the money” they report affirmed.

Pat Cunningham, South African fraud prevention services head, which represents major creditors like retailers and banks; in that report affirmed that fraudulent applications and claims cost members an estimated R1.1-billion in year 2008 and in many cases identity theft had been used.

In the same vein, reported that identity theft could be costing South Africa more than R1-billion every year, according to a major credit bureau and a national insurance organization; contrary to Botha’s claim that estimates currently stand at R500 million.


Reuters in Apr 2007 reported that the rise of organised cyber-crime has led to a near 70 percent surge in the number of people falling victim to identity fraud.

ID fraud trends have moved away from opportunistic criminals to professional fraudsters who are “e-enabled, IT savvy and anti-social networked”, it said.

Some 2,124 people contacted Experian’s victims of fraud service, which helps people “clean-up” their credit report after falling prey to fraudsters, in the second half of 2006 — up 69 percent on the year”




“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 website)




Banks and existing antifraud solutions


There are lots of antifraud solutions that are being introduced into the Banks and I will reaffirm that biometrics is the only secured solution. With it, you have non-repudiation; all that is required is you go to the Bank, place your fingerprint and only you can access your funds. The CIS solutions can ensure this; they are very superior and less expensive solution.



Cost on acquiring the CIS Solution


Our costing are very simple, we have a straightforward costing, and when you buy from us, everybody buys the same price; whether you are a big Bank with over 1,000 branches or a small Bank with about 20 branches. We are keeping our pricing so low irrespective of the customer’s size; it is easily affordable. Our software is unbelievably well bought; the Bank requires buying Fingerprint Scanners and Cameras; due to its large branch network, all these are not also expensive, it is based on a monthly fee and it flows into operational cost; saving the Bank a lot of money.



Advice to target Market


My biggest advice is that they should buy the CIS Solution; they should have a look at how well their “Know Your Customer” (KYC) is; pull your customers profile and see if you actually know them. They CIS Solution is really get to know your customer, you know he is not dealing on a multiple name inside your Bank and you can really focus on one customer and make sure that you grow your customer base.



Nirph CIS Solution in other parts of the world


We are busy moving into places like Turkey, we are in Colombia and Mexico. South America is quite a big drive for us; we are also Africa; in places like Tanzania; we already have a few Banks in that country. Other locations are Iraq and Iran; actually the Solution is built for any place in the world. And our next step will be soon to penetrate more the American Market. People will rather give you their fingerprints and ensure that their money is safe.



Advice to Nigeria’s Central Bank on the CIS Solution



I was fortunate to have meet Sanusi Lamido, the Governor of the Central Bank of Nigeria (CBN) in the last place he worked before emerging the Governor of the Central Bank; he is an incredible man when I met him. What he is doing now is great and I know that he knows about the CIS Solution and we have been knocking and hoping to open up doors; especially to bring all the Banks in Nigeria together and creat a central solution where Banks can share privileged information on fraud. Like I earlier affirmed, all these must be driven by the Central Bank.







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