The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) is making plans to come up with regulations to tighten the process of Subscriber Identification Module (SIM) card swap for telecom subscribers.
Dipo Fatokun, director, Banking and Payments System Department, CBN, disclosed this at the weekend, while making a presentation on: “Electronic Payments Industry’s Performance and Regulatory Issues,” at a bi-monthly forum organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Fatokun said some of the fraud the financial sector is still battling with is the issue of SIM swap.
“We have heard of instances where people would say for three days my phone did not work. And because many of us carry more than one phone, if one is not working, at least one will work. So, what they do is that they swap your phone. That is, they just walk up to a service provider and claim to be the owner of the line. Most often, they have studied that number and they have collaborators, probably in the bank”, he said.
Speaking further, he said “because the process for doing a change of SIM card is so loose, the telcom company would change the SIM card for the person and so he assumes the phone number. What does he do? He puts the SIM card in another phone and start using the USSD to make transfers out of the account into another account. So, we are working with the NCC to tighten the process of SIM card swap. It may include biometrics and a unique number may be required”
However, Nigeria has consistently over the last three years reduced the value of electronic fraud. The game changer is the Bank Verification Number (BVN), he said, adding that It is not only helping to identify who owns what, but going forward, just as it was announced by the Bankers’ Committee at the last meeting, the BVN would be used as an instrument to track fraudsters in the system.
“When electronic fraud happens, money is moved from one account to another account. That other account that money is moved to, the owner can be identified. And when such owners can be identified, they can be blacklisted or watch listed.
“It means that fraudsters can be identified and if possible taken out of the system. So, the BVN is going to be a game changer in the respect. We are working on the final framework and when it is concluded, it would be issued to the industry.
The CBN assured that Financial Technology (FinTech) companies will not take over the roles played by commercial banks in delivering services customers, adding that demand for the services of FinTechs will continue to rise, even as they need commercial banks’ to enable them operate effectively.
The CBN director explained that banks in developed world are now focusing on their core functions and leaving other roles to service providers. “FinTechs have always been in existence, it is just that more prominence is being given to their roles. In some jurisdictions FinTechs are being allowed, or plans are under way to allow them connect to the central bank which, previously, was the exclusive preserve of the commercial banks,” he said.