As Nigeria moves to eradicate the culture of cash-based transactions, CHIMA AKWAJA spoke with Mr. Tim Akano, Vice Chairman, Wini Group, an information technology security company on the roadmap the country needs to adopt to ensure a successful implementation of the cashless initiative.
Is Nigeria fully prepared for a cashless economy with our level of IT security?
A short answer to the question is no. As at today, Nigeria is not fully ready as far as cashless economy and IT security is concerned. I mean in terms of security protection given the reality of what is happening. The expenses that had been incurred had been incurred on behalf of the financial institutions’ network, not on behalf of the customer network and that is the fact. Survey still reveals that many customers still don’t know what to do to protect themselves when doing transactions online.
The banks are still concentrating on themselves. So for us to be fully ready, we can borrow a leaf from the strategy in South Korea. When the country started cashless economy, the bulk of money for the first year was spent on education of people. It was not until when people were fully educated and empowered with the ‘dos and don’ts’ of the cashless economy and that the country effectively launched.
In Nigeria, yes, the banks are getting ready, but are the people getting ready? The answer is no and we can equally get the answer of customers’ readiness from their reactions because a lot of cash transaction is still going on in the economy today. There is also the need for us to have an integrated platform for identifying Nigerians as this is also very important in the identity management for successful cashless transactions.
We hope that the effort of the government through the National Identity Management Commission (NIMC) would also be effectively delivered towards creating a robust integrated database for identifying Nigerians. However, we do not have this database currently in the country. Nigeria is a complex society but we appreciate the role the Central Bank of Nigeria (CBN) is playing and all the people that are involved with regards to driving the cashless economy.
What are the challenges and possible solutions to the loopholes?
The first challenge which we have not paid so much attention to is awareness creation on the risk involved. We have not done much in this area and it is actually the beginning of the exercise. In this cashless economy initial, people are not yet fully aware about the inherent risks in operating a digital economy and to solve the problems. We need massive awareness campaign.
The second challenge is that cashless economy is highly vulnerable to compromises. The web browser is the most vulnerable tool. It is the weakest part of the chain in a cashless economy. What we notice currently is that banks concentrate on their own system but the bank customers are not secure. The unsecured customer with access to the bank network can be hacked into with technology that exists today that allow people to compromise bank networks through your own unsecured network.
Banks need to secure their customers both in Nigeria and beyond. It is not enough for them to have spent N1billion on IT security that is limited to their premises. Every individual that is doing business with a bank equally needs an element of security empowerment to ensure that the bank network itself is not exposed to compromises emanating from customers’ accessing the bank networks in the course of transaction.
The third challenge is the level of infrastructure on ground. So many times, people go to ATM machines and the cash is not dispensed even after the system had debited your account. These are infrastructural challenges. Although at the end of the day, the bank will still refund you, but at that point in time when you need money you are already disappointed.
For instance, I have a friend in Abuja, who recently lost a sum of N1.5m in through a fraud called ‘Card Owner Not-Presence’. Somebody can compromise your phone and your bank calls you to tell you that you had ordered them to transfer a specified amount into another account on your behalf. Indeed, the voice that will pick the call is not the real owner of the phone, but the voice that replies the bank gives the go ahead.
In today’s cyber world, your phone can be hijacked for an hour and for that one hour, it can be used to compromised so many things about you and defraud you. It can even be used to kidnap your children or wife. Technology advancement posses so much risk. A lot of banks have lost money to this e-fraud type and I can understand the reason why banks would not like to blow the loss of money on their network. It is because of the need to build the confidence of the people in cashless economy. I’m an apostle of a cashless economy because it is going to save us a lot of cost.
Cashless economy reduces corruption in the society. All of us are aware of what is going on in Nigeria today where a lot of millions of dollars have changed hands. With cashless economy, it is impossible that about $600,000 would change hands from an oil baron to a lawmaker without the system flagging it down. In China, North America and Europe, it is impossible for one million dollar to exchange hands without the system capturing it. So, we need cashless economy to address all these dramas of corruption going on in our country.
What security system are we looking for and where should it be installed?
Security should be both for the banks and their customers. On the customer side, for instance, there is need for multi-factor authentication. As customer, therefore, you will need at least two factor authentications. If I want to open my laptop, for instance, it is going to send a password to my phone; I must have the password before I can open the laptop.
That is one factor authentication the second factor authentication is that my laptop only recognise my face. The third one is that my laptop only recognises my voice and finally, even when it is stolen, there is a technology solution that we have that can allow you to remove all the information on the laptop remotely such that information in the laptop is not useful to the person who has stolen it again. In essence, the information has been frozen.
For you as a bank customer, you equally need multi-factor protection, not only the banks. You need what we call token and you also need protection from ‘Man-in-the-Middle’ attack. Some people see everything you are doing online. As you are sending your money online, if there is ‘Man in the middle’ there, that transaction will be successfully completed but not going into the intended account number but rather it is going into the account of the ‘man in the middle’ which you do not see.
But it is going to tell you that your transaction has been successfully completed but when you call the owner of the account you wired the money to, you are told that no money has been received. What happened is that the money has been diverted into another account by the man in the middle. At the moment you are about to send the money, the man-in-the-middle had already created another pipeline, that the money instead of going into your intended recipient account go to his own account.
What are the benefits of a digital economy?
Regarding the benefits of cashless economy, we’ll save money when we go cashless. The money we use in printing notes will be saved. Another area of cost saving is that it will reduce the cost of transporting money from one place to another. For instance, you must have noticed also that the number of bullion vans that you see on the roads have reduced. These bullion vans use petrol, use personnel and these also cost money because today, you can see for yourself that bullion vans are far disappearing from our roads.
Another area of benefit is that it saves life. In those days many people travelling were stopped in the night, their money collected and armed robbers also killed those who did not have money on them. Now if cashless initiative is introduced and everybody knows that people are not carrying cash about again, armed robbers will not waste their time wanting to go and stop anybody in the middle of the night to rob again.
The masses have so much to benefit under the cashless economy while the looters have so much to lose. When it is embraced fully, it becomes very impossible for people to exchange cash at government levels. There is need for the banks to increase the level of security on their networks and for the safety of all the millions of bank customers, that area has not been properly addressed and it is today the weakest area of the chain.