Mary Adegoke, 70, is a retired teacher and a depositor with one of the Nigerian Tier-1 banks. The mother of five got a rude shock on Friday, January 8, 2021, when she got a call from a stranger, who claimed to be her new account officer, requesting a One Time Password (OTP) that was sent to her phone a few minutes earlier.

Adegoke told Nairametrics that she wouldn’t have shared the information if the caller had not answered a few security questions like her account number, digits on her ATM card, and Date of Birth. She said, “I had no reason to doubt him after providing the answers. I never understood what he was up to and what the OTP meant and why he asked me to delete it immediately after I shared it with him. A few minutes later, I got a debit alert of N40,000, which was my pension for the month.

“At that point, I started sweating and knew I had fallen victim to fraudsters. But what I still don’t understand is how he got my account number and other personal details.”

READ: How scammers use SIM cards to rob your bank accounts

Mrs Abimbola Omole, 65, is another retiree and a victim of similar fraud. The retired civil servant is also a depositor with one of the Tier-1 banks, which has its headquarters in Marina, Lagos.

Omole had declined the offer of an ATM card through her account officer before travelling out of the country. The account officer had then proceeded to forge the customer’s signature to request the ATM card.

“I couldn’t believe my eyes when I got debit alerts that a sum of N150,000 was deducted from my account within three days,” a bewildered Omole reported. “When we traced the location of the withdrawal, we found it was in Onitsha. I am sure the banker must have disclosed my details to someone there because she had asked me to lend her money before I travelled,” she recalled.

Adegoke and Omole are only two of several bank depositors, especially elderly citizens, who have been fleeced by fraudsters masquerading as bank staff. These crimes are unmistakably and increasingly targeting a specific class of people – vulnerable elderly people.

READ: How thieves use Covid-19 to defraud bank accounts

Ex-bankers share their experiences

Sources across the top banks revealed that many bankers engage in various fraudulent activities as a result of laxity on the part of some officials in the internal control departments at various levels. Nairametrics found that many of these frauds were perpetrated by third parties in connivance with insiders, targeting mostly elderly customers within the 60-70 years age bracket, who may expectedly not be tech-savvy. This is usually done by requesting that the unsuspecting customers provide vital information such as their Personal Identification Number (PIN), which the fraudsters then use to debit their accounts.

“We treat scores of fraud cases every year and most of them are done in connivance with senior officials of the bank at the branch level. Recently, a fraudster got the PIN of a customer and withdrew N100,000 from the account on a particular Sunday,” a banker who pleaded anonymity told Nairametrics.

A former Manager of one of the Tier-1 banks, in an exclusive interview with Nairametrics, disclosed that three of the staff of the bank in Sokoto were arrested by the Economic and Financial Crimes Commission (EFCC) in March 2020. The bankers were arrested for conspiring to steal the sum of N1.2 million from a customer’s account and were said to have done so by issuing an ATM card in the customer’s name to an impostor who then proceeded to clean out the account.

READ: CBN releases new guidelines for OFIs, orders inclusion of NUBAN code or face sanctions

Although some of this money was later recovered by security agents, investigations reveal that the system is beset with several other unrepentant fraudsters still plying their craft at the expense of unsuspecting customers.

A banker with a Tier-2 bank also shared another case with Nairametrics, which was uncovered by EFCC. According to her, the anti-graft agency uncovered a criminal syndicate of bankers who specialized in forging signatures of deceased bank customers and stealing from their accounts. They also execute fraudulent financial transactions, including unauthorized debits of depositors’ funds.

The alleged members of this syndicate were in March, arraigned before a Judge of the State High Court in Uyo on a 23-count charge bordering on conspiracy, forgery, obtaining by false pretense and criminal conversion, depositors’ funds to the tune of over N37.6 million.

One of the accused persons was found by the EFCC to have used his position as the Head, Operations and Transaction Service and Delivery, to collude with third parties and establish the syndicate which specialized in perpetrating fraudulent transactions and deductions.

Further investigations also showed that without the authorization or knowledge of the management of the bank, the defendants managed a fictitious fixed deposit account with interest accruing to it.

READ: Personal data of 533 million Facebook users leaked on a hacking forum

What they are saying

Head of Media, EFCC, Mr Wilson Uwujaren, disclosed that the anti-graft agency had prosecuted scores of bankers who had either swindled depositors or the banks in different cases.

He added that there were yet more cases pending in Federal High Courts in Port Harcourt, Rivers, Yenagoa, Bayelsa, Edo, and Lagos States, among others.

“What happens is that when a staff of the bank is involved in such activities, the bank takes the person out of the system through dismissal. But now, we are going after the banks and the personnel used to perpetrate fraud,” he said.

Banks must fine-tune their internal control processes to better protect their customers as their failure to do this would be costly.

Increasing use of mobile

Mobile adoption in Nigeria has risen over the last half a decade as the Central Bank’s policies on financial inclusions have increased reliance on mobile phones as a tool for conducting banking activities.

According to the latest data from the NIBSS, Mobile transactions in Nigeria (mobile & USSD) surged by 82.6% in 2020 to stand at 1.69 billion compared to 928.86 million recorded in the previous year.

Banks also earned a whopping N216 billion from digital banking transaction, buttressing just how critical mobile is to shoring up bank revenues.

Despite this heavy reliance on mobile as a strategic tool for financial inclusion, fraudsters are also benefiting just like the banks.

Traditional banks have been facing stiff competition from fast-rising digital banks. These digital banks emerged with higher consumer demand and have offered a more convenient full-banking experience to their users including higher interest rates on savings thereby attracting more people to adopt their services.

This has caused some traditional banks like Wema Bank and Sterling Bank to adopt this trend and also develop their own digital banking platforms.

Here is a list of the top digital banking apps in Nigeria.

Vbank

VFD Microfinance Bank is a fully digital bank that offers a wide range of financial products and services to professionals and entrepreneurs across all sectors. The digital bank has over 100,000 downloads on Playstore. They offer zero charges on transactions. Free account maintenance, monthly interest on savings, swift and secure transfers, withdrawals, and bill payments.

Pros

• Instant account opening without any paperwork.
• Fingerprint authorization: Login with your fingerprint and authorize transactions using your 4-digit PIN.
• Good customer service.
• Set up and track your spend budgets.
• Order debit cards from the apps.
• USSD banking service available.
• Easy bill payments on the app.
• Target savings with 8% interest rate.

User complaints

• New update causes app to crash.
• Upgrading KYC takes relatively longer.

Kuda bank

Kuda Bank is a free, digital-only bank with a microfinance banking license from the Central Bank of Nigeria. The bank includes tools for tracking your spending habits, saving more, and making the right money moves. They don’t charge card maintenance or account maintenance fees. Kuda has 1M+ downloads on Playstore. Its customers get 25 free transfers to other banks every month.

Pros

• Free debit cards.
• Good user experience.
• Free withdrawals at over 3,000 ATMs across Nigeria.
• 15% annual interest rates on savings.
• No paperwork involved when signing up.
• Automatic budgeting tools for easier money management.

User complaints

• Cards often take a long time to arrive.
• No SMS notification when you get credited.
• No USSD code option for transactions.
• Identity verification takes time.

AlatbyWema

ALAT is Nigeria’s first fully digital bank, designed to help you do more with your money. Alat is owned by Wema bank. Just like every other digital bank, there is no need to visit a bank to open an account. Alat has over 500,000 downloads on Playstore.

Pros

• Free bank card delivery anywhere in Nigeria.
• A Virtual Dollar Card for online payments.
• Bill payments option.
• Collateral-free loans are available.
• Save easily with automated goal saving.

User complaints

• The virtual card does not yet work.
• Delay in physical card delivery.

Sparkle

Sparkle is a lifestyle and finance app. It is a digital ecosystem providing financial, lifestyle, and business support services to Nigerians around the world. Licensed by the Central Bank of Nigeria (CBN), Sparkle is all about helping people achieve what they want, whether it’s entertainment, education, saving, or investing in the future. Sparkle has over 100,000+ downloads on the play store.

Pros

• Create an account with just your Bank Verification Number (BVN), email address and phone number.
• If you ever lose or misplace your card, you can freeze and unfreeze it in the Sparkle app.
• Save using Sparkle Stash for different goals at the same time.
• Percentage savings where you determine what percentage of your account balance will be going to your savings every day, week or month!
• Get real-time instant notifications for your transactions.
• Bill payments; Pay your bills whenever you want, wherever you are.
• Split bills with friends and family on the app.
• Physical and virtual cards available.

User complaints

• New update causes the app to crash.
• Reversal on failed transaction takes time.
• Cards can’t be used for international transactions.
• Poor customer service.

Mint App

MyMintApp is a self-service platform developed for customers to carry out a range of digital and mobile banking transactions on their accounts. It offers customers benefits such as convenience, speed, online real-time access, the security of transactions and options to initiate basic service requests without having to physically visit the bank.

MyMintApp also offers different banking services such as SME Banking, Personal Banking, Corporate Banking, Internet Banking (Electronic Banking), Current Account Opening, Savings Account Opening, Business Services, Loans, e-Business Solutions, Personalized Money Tracking and Card Solutions, etc. Mint has over 10,000+ downloads on Playstore.

Pros

• Good customer service.
• Seamless account funding via Paystack or directly from your existing bank account.
• Different saving goals with competitive interest rates to help you save for a targeted purpose.
• Money Manager to help you tag your expenses according to the most common categories, and see real views of how and where you spend monthly.
• Zero transaction fees on bill payments.

User complaints

• No bonus when you refer someone to the app.
• The selfie verification process takes time.

Onebank

Onebank brings a whole new financial and non-financial experience to the digital space. This application comes with sophisticated features and an impeccable user experience. It is highly secure, convenient, and easy to use. Onebank also offers payments, lending, investment, advisory, informational, and lifestyle services which brings that intuitive banking experience on your mobile. Onebank is owned by Sterling Bank

Pros

• Create a wallet account instantly with your mobile number.
• Biometric authentication.
• Instantly create your virtual card for online shopping and decide the card’s usage and expiry.
• Investments; enjoy up to 100% returns on Naira and Dollar investments.
• Quick loans of up to N5 million in 5 minutes.
• Receive money from Onebank user via QR code scan.
• Pay for airline tickets, cable & internet subscription directly on the app.
• Cardless withdrawals are available.

User complaints 

• Prone to error when you try to sign in.
• Bad user experience.
• Transaction history only shows debits and not credit transaction.
• Failed transactions take time to be reversed.
• Difficulty when you try to switch devices.

Rubies

Rubies is a digital bank that disrupts regular banking by providing 100% digital top-notch services and technology at its peak. With Rubies, you can decide what your account number looks like. Rubies give you the financial freedom to do more than just banking and the app has garnered over 100,000 downloads on Playstore.

Pros

• No maintenance fees.
• Free Debit Cards: Also comes with an option of free delivery.
• Independent Banker: Refer people and earn every time they transact on Rubies.
• Customizable Account: Decide what your Account Number looks like.
• Proximity Transfer: Transfer money easily to friends on Rubies around you with a single tap.
• Open Account: Get an account on the fly, from anywhere (App, Website).
• Request Money: Request funds from friends on Rubies with a single button.

User complaints

• Verification process takes time.
• BVN verification unstable.
• App downtime takes more than 24 hours to resolve.
• Difficulties upgrading account.

Why this matters

With the increasing number of digital banks and fintech startups, the competition for acquiring and retaining new and old customers is getting stiffer. More traditional banks will need to adopt digital banking to stay competitive.