Kayode Ogunwale

Africa’s Global Bank, United Bank for Africa (UBA), has said that stakeholders need to come together to checkmate growing threats to the country’s digital payment system.

The Head of Digital Banking at UBA, Olukayode Olubiyi stated this while speaking on the topic titled ‘Unlocking the Future of Payments’ at the 2023 annual conference of the Finance Correspondents Association of Nigeria (FICAN) in Lagos at the weekend.

Cyber threats are one of the most prevalent threats facing digital payment technology. Nigerian banks lost a total of N9.5 billion to electronic fraud within first eight months of 2023.

Olubiyi said, “Lack of proper or insufficient regulatory oversight over the digital payments system can result in major and systemic loss of business. The regulations covering digital payments should be robust and designed enable a secure and competitive landscape for digital payments players to run seamlessly.

“Cybercrime poses a huge challenge for the firms in the digital banking space. Hence, it becomes imperative that institutions secure the data that the criminals are after.”

According to Olubiyi, banks will have to invest heavily in systems and processes to defend their customers’ data.

“Partnerships between banks and fintechs may be required in the use of machine-learning technology systems, Artificial Intelligence to proactively prevent potential breaches and data loss.

“Cybercrime can be curbed by ensuring efficient cybersecurity through combined security, multi-factor authentication, cyber insurance, consumer awareness, antivirus and anti-malware application.”

He remarked that digital payments had become an increasing target of cyber hacks and attacks and that could result on loss of confidence in the ecosystem if not addressed.

He added, “Today, the speed at which organisations and digitally drive their systems is at such an alarming rate. Any future-minded institution would want to join in the race. Companies climb on this ladder of ranking is so dynamic that no firm has its permanent hold on any position.”

He noted that the Nigerian government and financial institutions were focused on increasing financial inclusion, especially in rural areas, and initiatives like the National Financial Inclusion Strategy aimed to bring more people into the formal financial sector.

According to Olubiyi, the future account holders are the users of the digital solutions largely the Gen-Z and Millennials, saying that these two generations make up over 80 per cent of digitally-enabled bank accounts by the statistical research evidenced above.

He disclosed, “At UBA, our mobile transactions recorded 414 million count of transactions and N19.3 trillion value of transactions in 2022 as against 118 million count of transactions and N6.4 trillion value of transactions in 2021.

“In the 21st century, the development of digital banking is transforming the landscape of traditional retail banking across the globe. This, however, set the tone for the future of digital banking for all.”

He explained that the use of Internet of Things (IoT) in the banking industry has the potential to provide customers with a more personalised, convenient and secure banking experience.

“It is predicted that digital wallets will account for more than 50 per cent of all ecommerce payments worldwide by 2024, with account and QR-code based transactions leading the way.

“The next winners in the digital banking race will be the banks who manage to continuously generate tailored offers and personalised experiences for their customers. The answer to understanding what customers want and need lies within the amount of data across different banking channels.”

Olubiyi added that by end of 2023, the need for a secure and smooth authentication process would prompt nearly 2.6 billion biometric payment users globally.

Also, the Managing Director of theNigerian Inter Bank Settlement Systems ( NIBSS), Premier Oiwoh, emphasised stakeholders’ partnership in the effort to extend e-payment channels across the country.

According to Oiwoh, the partnership will in addition to wider coverage, also help to check abuses, dispense errors, instant resolution of errors as well as updated in technological resources in delivering first class e- payment across the country.

The NIBSS boss, who was represented at FICAN conference by Bola Enigbokan, said, “Collaboration is mandatory; it is not a choice. As we have gathered here doing our own workshop, the fraudsters are also doing their seminars and they strategise. Often times, they are even ahead of us. I think that is even why we are even having this discussion today.”

He assured Nigerians that the national payment infrastructures NIBSS, owned by all banks was committed to ensuring seamless transactions, customer protection, and the consistent improvement in technologies driving e-payment systems.

Earlier, the Chairman of FICAN, Chima Nwokoji, stated that the challenges witnessed in the country’s payment system during the cash scarcity provided a window of opportunity for the banking system to be proactive and inventive.

According to him, this would enable the lenders to reap the benefits provided by electronic payments.

“As banks and fintech are expanding their financial services portfolios to capture the unbanked and semi-banked, they should not only be expanding their digital infrastructure but also making it more sophisticated to ensure seamless transaction and safety of funds,” Nwokoji remarked.