Financial inclusion in Nigeria has faced numerous challenges, hindering the Central Bank of Nigeria’s (CBN) goal to increase it to 95 percent by 2024.
In a report by The Guardian, a concerning issue has emerged which suggests an alleged illegal mining of customer data through point of sales (PoS) terminals across the country.
This practice is endangering agent banking, a scheme designed to enhance financial inclusion in the country.
In recent times, criminals armed with sophisticated tools have been targeting vulnerable merchant PoS terminals.
They exploit these terminals to steal payment card data and PINs, leading to fraudulent activities like card cloning.
Data mining, initially used for business analysis, has taken a sinister turn as cybercriminals exploit unsuspecting individuals’ vulnerabilities for financial gain.
Some Background to the Story
While agent banking has flourished, the challenge posed by illegal data mining is a significant threat.
The CBN, through the Shared Agent Network Expansion Facilities (SANEF), has increased the number of agents to over 1.4 million, and PoS terminals have risen to 1.8 million in March, a 75 percent increase year-on-year.
However, illegal data mining jeopardizes this progress. Some industry insiders point to terminals operated by digital banks, especially two fintech firms run by Asians.
These operators allegedly use software in the terminals to siphon data from Nigeria to other parts of the world for unauthorized purposes.
Key Things You Should Know
Rising Data Privacy Concerns: Data privacy is a significant global issue, but concerns about safety and monitoring persist in Nigeria. Experts call for more attention to these issues.
Criminals are Posing as PoS Agents: Untrained agents have fallen prey to fraudulent customers who use data theft to defraud unsuspecting individuals through fake alerts or currencies. Swapping ATM cards has also become a popular criminal trend.
Customers’ Data Compromised on the Rise: Users’ data can be siphoned from PoS terminals if a chip is planted in the machine to read and copy card information. Customers are advised not to disclose vital information such as card verification value (CVV) and card expiration date to PoS operators.
Notable Comment
While to a reporter from The Guardian, a banker from a new-generation bank warned that data can be downloaded from customers’ ATM cards if a chip is planted in the machine. He advised customers to safeguard their account and debit card-related information.
Predictions of the Trend
The increasing cases of illegal data mining and related fraudulent activities suggest a growing threat to financial inclusion in Nigeria. If not addressed promptly, this trend may undermine the country’s efforts to expand financial services to all citizens.
How You Can Stay Safe
To avoid falling victim to the alarming trend of data mining and its associated risks, individuals and businesses can take several precautions.
It’s crucial to safeguard personal information such as card verification value (CVV), card expiration date, and PINs. Never share these details with PoS operators or anyone else unless it’s for a legitimate transaction.
Frequent monitoring of bank statements and transactions is vital. Individuals should report any suspicious or unauthorized transactions to their banks immediately.
When making transactions at PoS terminals, choose well-established and reputable merchants. Avoid using unfamiliar or unverified terminals, especially those in remote or unmonitored locations.
Businesses should ensure their PoS terminals use data encryption to protect customer information during transactions. This encryption makes it difficult for cybercriminals to intercept and misuse data.
Stay updated on the latest cybersecurity threats and trends by following Clariform reports and YouTube channel. Knowledge is a powerful tool in defending against data mining and other cybercrimes.
If customers or business owners suspect any fraudulent activities, they should report them to their banks, the Central Bank of Nigeria (CBN), or relevant authorities promptly.
By following these recommendations, individuals and businesses can significantly reduce their vulnerability to data mining and associated fraudulent activities, contributing to a safer financial environment in Nigeria.
