By Ndubuisi Francis in Abuja
The Central Bank of Nigeria (CBN) and other stakeholders in the nation’s financial sector have underscored the need for appropriate measures to secure online, mobile and payment services as well as devise potent strategies to counter existing and emerging threats in the sector.
Part of the strategies, according to them, is to develop an efficient, reliable and electronic payments system and sensitising the public on how to inoculate themselves against potential threats.
In a keynote address he presented at a two-day workshop on emerging regulations to protect online, mobile and payment services, the Director, Banking & Payments System Department, CBN, Mr. Dipo Fatokun, observed that one of the key tasks of the apex bank was to promote the smooth operations of an efficient payments system, which he said, is core to the financial stability of any country.
The workshop, which was organised by Maxut Consulting Experts and Vasco Data Security, in collaboration with the CBN dwelt on the emerging trends in banking and payment systems as well as regulatory and security implications.
PaymentsÂ systems, Fatokun added, have importantÂ implications for monetary policy implementation and for the efficiencyÂ of the economy.
He noted that “in order to achieve the broad objectives of the payments system in the country, the CBN develops and regulates the implementation of regulation to facilitate the growth of initiatives that will harmonise payment operations in the country.”
In its regulatory role, the CBN, he stressed,Â is careful to approach the dynamic of payments system policy creation as a delicate balance, in order not to stifle innovation and growth in the payments system.
“In addition to the aforementioned, the bank has developed a financial inclusion strategy, the PSV 2020 Vision and cash-less policy drive with specific targets and timelines. The sustenance of these initiatives will ensure that financial services are provided at affordable costs to sections of disadvantaged and low-income segments of the society.
“With growing usage, interest, risk and new technology; there is continuous need to update payments system regulation as a result of its dynamic and ever-changing nature. Financial authorities around the world have a need to regulate payment services to protect consumers while ensuring the development of a secure, competitive and innovative environment for electronic payments,” he stressed
According to the CBN chief,Â technological developments have led to disruptive innovations by financial technology (FinTech) companies in the financial system, adding that these innovations had facilitated the expansion of electronic payments and helped in providing financial services to previously unreached groups.
Fatokun pointed out these developments had led to the participation of non-financial organisations in the payments system.
The apex bank, he disclosed had tried to incorporate a number of these service providers into the regulatory space, noting that a number of them still operate under the radar, providing user-friendly mediums and platforms for accessing financial services, preferring to remain in the unregulated space, as a result of the perceived difficulties of licensing and regulation.
“With increased innovations, platforms are being created that enable the initiation and completion of financial transactions without the use of any regulated financial service provider.
“As acceptance for these channels increases, so will its spread. This poses a challenge for the oversight of the payments system in Nigeria,” he said.
The participation of the apex bank in the workshop, he stated, would enhance the knowledge of staff on the operations of non-financial service providers in the payments system, and urged banks in the country to ensure standardisation in all transactions while making available their Application Programming Interphase (API).
API is a set of functions and procedures that allows access to data or a service in order to provide greater functionality to the application user.
Fatokun disclosed that banks had been directed to make their APIs available to FinTechs, adding that the Nigerian banks would fully implement this when implications of its availability are fully understood.
In an interview on the sidelines of the workshop, the President, Maxut Consulting, Mr. Micheal Odusami said the event would help keep the CBN abreast with the current trends, and future of the banking industry as well as expose the country to current trends in different parts of the world in the sector.
His words: â€œThey are already putting regulations in place to address some banking issues and sharing them here will see how some of the stuff we are already doing will help us.”
On the level of online security risk in the country, Odusami said a lot of the challenges revolve around internal fraud (people working within the system), social engineering fraud, and impersonation.