Cashless Policy and the Cybersecurity Challenges in Nigeria (I)

By Dr. Nathaniel Atansuyi

The cashless policy in Nigeria, implemented by the Central Bank of Nigeria (CBN) as a strategic
move towards a more efficient and inclusive financial system, has gained significant momentum in recent years.

However, along with the numerous benefits of a cashless economy, such as convenience, speed, and reduced transaction costs, cybersecurity challenges arise due to the Increased reliance on digital payment systems. Cyber threats, including fraud, data breaches, identity theft, and other malicious activities, pose significant risks to Nigeria’s cashless payment systems’ security and integrity.

Additionally, the emergence of the “Japa Syndrome,” (an act of flfleeing or absconding for greener pastures or better living conditions) by cybersecurity professionals, has further compounded the cybersecurity challenges in Nigeria’s cashless economy. In this article, we explore the cybersecurity challenges associated with Nigeria’s cashless policy, including the impact of the Japa Syndrome, and the crucial role of cybersecurity consultants in mitigating these challenges.

The CBN introduced the cashless policy in Nigeria in 2012 as a strategic move towards reducing the dependence on cash transactions and promoting digital payments. The policy aims to achieve a more efficient, transparent, and inclusive financial system by promoting electronic payment channels, such as cards, mobile banking, and online transfers, as well as reducing the risks andcosts associated with cash handling. Since its inception, the policy has gained significant traction, despite the recent implementation challenge of the currency redesign and cash swap policy of CBN.

Digital payment systems have become increasingly popular among Nigerians for various financial transactions, including bill payments, fund transfers, and online purchases.

However, the adoption of digital payment systems has also brought about new cybersecurity challenges, as cyber threats continue to evolve in sophistication and scale.

Also Read: Are there Really Cashless Economies?

The rapid expansion of digital payment systems, coupled with the growing reliance on technology and the increasing connectivity of financial networks, has exposed vulnerabilities that are being exploited by cybercriminals. Japa Syndrome, where individuals abscond to seek good living conditions in foreign countries, has further exacerbated the cybersecurity challenges in Nigeria’s cashless economy. It is imperative to understand the cybersecurity challenges associated with Nigeria’s cashless policy and the impact of the Japa Syndrome to effectively address them and safeguard the integrity and security of digital payment systems.

Cybersecurity Challenges in Nigeria’s Cashless Policy

The cashless policy in Nigeria has faced several cybersecurity challenges that pose significant risks to the security and integrity of digital payment systems.

Some of the key challenges include:

▪ Fraud

One of the major cybersecurity challenges in Nigeria’s cashless economy is fraud.
Cybercriminals employ various fraudulent activities, such as phishing attacks, social
engineering, and identity theft, to gain unauthorized access to users’ accounts, steal sensitive information, and perpetrate financial fraud. These fraudulent activities always result in financial losses for individuals, businesses, and financial institutions, thereby, eroding trust in digital payment systems.

▪ Data Breaches

Data breaches, where unauthorized individuals gain access to sensitive data, are also a significant cybersecurity challenge in Nigeria’s cashless economy. Data breaches in the unguarded exposure of personal and financial information, including personal information, credit or debit card details, bank account numbers, and transaction history, thereby leading to identity theft, financial fraud, and reputational damage.

▪ Malware Attacks

Malware attacks, such as viruses, ransomware, and Trojans, are another cybersecurity challenge in Nigeria’s cashless economy. Malware can infect users’ devices,
compromise their sensitive information, and disrupt the normal functioning of digital payment systems.

Read More: Is Nigeria Really a Cash Economy?

▪ Insider Threats

Insider threats, which involve malicious activities by insiders with authorized
access, such as employees, contractors, or business partners, pose a significant cybersecurity risk. It has been reported about insiders abuse their privileges to gain unauthorized access to sh/ystems, steal data, or perpetrate fraud, posing a severe threat to the security of digital payment systems.

▪ Social Engineering Attacks

Social engineering &&, where cybercriminals manipulate individuals to divulge sensitive information or perform actions that compromise security, are also significant cybersecurity challenges. Social engineering attacks, such as phishing, pretexting, and baiting, exploit human vulnerabilities to gain unauthorized access to digital payment systems.

Lack of Awareness and Education

Another challenge in Nigeria’s cashless policy is the lack of awareness and education among users about cybersecurity best practices. Many individuals and businesses may not be aware of the potential cybersecurity risks associated with digital payment systems or may not have the necessary knowledge and skills to protect themselves from cyber threats.

 

 

Dr. Nathaniel Atansuyi, FIIM, MNCS, MCPN (C.itp), Cybersecurity Analyst of Safe Mode Data
Technologies [SMDT] Limited.