Nigerian Banks urged to embrace Customer Identity Solution to checkmate fraud-Expert

By Peter OBIORA investadvocate

Oct 12 2010 02.40 GMT


Nigerian Banks have been urged to apply the Customer Identification System (CIS) a biometrics solution to checkmate fraud in its operations.


Niyi Ajetumobi, Managing Director/ Chief Executive Officer (MD/CEO) of   NAJCOM Technologies Limited (NAJCOM), first certified resellers of the solution gave this advice in Lagos Nigeria.


Ajetumobi affirmed that the CIS Solution is product from South African Company, Nirph Digital (Pty) Limited; which specialises in biometric identification.


“The (CIS) is being introduced as a biometric solution to the extensive fraud that takes place in the banking and other financial sector, as well as in government agencies in Nigeria and worldwide” he said.



He affirmed that the 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” Ajetumobi said.


“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” he affirmed.


He confirmed to investadvocate that 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” Ajetumobi said.


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


The NAJCOM MD confirmed that the CIS solution is not meant for only Banks to identify and verify their customers; but organisations such as pension funds and other Government Agencies can use same to verify their beneficiaries.


In the same vein, Theunis Botha, CEO of Nirph South Africa makers of the CIS Solution in a recent visit to Nigeria confirmed that the CIS has been used in countries like Uganda, Miami in the United States (US), as well as Dubai United Arab Emirate (UAE).


He noted that Automated Teller Machine (ATM) fraud is a daily occurrence in Nigeria.  “A 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 UAE” he said.


“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” he said.


Botha further affirmed that 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” he said.


Botha further affirmed that with the CIS Solution device installed in the ATM machines, 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; but only your fingerprint” he said.


“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” Botha said.


He confirmed that in South Africa alone, identity fraud has reached an estimated R500 million about N10 billion.


“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” he said.





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