Wema Bank bolsters platform security with facial recognition technology following ₦685 million fraudulent losses

Wema Bank, a prominent financial institution in Nigeria, has recently entered into a strategic partnership with Daon, a globally recognized company specializing in digital identity and trust solutions. This collaboration is aimed at bolstering the security of Wema Bank’s digital platform by incorporating advanced facial recognition technology. The move comes as a response to a series of incidents aimed at mitigating fraudulent activities on the bank’s platform.

In a detailed announcement, Wema Bank revealed that it has integrated Daon’s innovative applications, namely Daon xProof and (xAuth/xFace), into its existing banking app through the Daon IdentityX® platform. These applications are designed to enhance digital identity verification and authentication processes, making them more robust and secure for users.

The implementation of this technology has been a collaborative effort between Daon and its regional associate, Ouranos Technologies. The primary objective is to provide Wema Bank’s customers with a seamless and secure banking experience. With this technology in place, customers can now perform a variety of everyday banking transactions through multiple engagement channels, including the simple act of taking a selfie. This not only streamlines the banking process, saving valuable time for customers, but also significantly elevates the security standards by employing sophisticated liveness detection features and other mechanisms to prevent presentation attacks.

The integration of these solutions is made possible through Daon’s groundbreaking concept, Identity Continuity, which allows Wema Bank to conduct both customer onboarding and authentication across various channels using a unified platform.

The urgency of adopting such advanced security measures is underscored by Wema Bank’s recent experiences with fraudulent activities. In a report by Innovation Village in April 2024, it was disclosed that Wema Bank suffered substantial financial losses amounting to ₦685 million (approximately $594,943) in 2023. These losses were attributed to fraudulent incidents and forgeries across its digital and collection/payment channels, including transactions involving third-party platforms. The introduction of Daon’s facial recognition technology is a strategic step by Wema Bank to combat such security breaches and protect its customers’ interests.

In response to these security challenges, Wema Bank took decisive action to reinforce its defenses against fraud. The bank significantly expanded its fraud monitoring team within the digital compliance department, enhancing its capability to detect and respond to fraudulent activities more effectively. This expansion is part of a broader strategy to safeguard customer transactions and maintain the integrity of the bank’s digital services.

Additionally, Wema Bank launched a comprehensive anti-fraud campaign aimed at educating its customers about the risks of fraud and the best practices to avoid falling victim to such schemes. The campaign is designed to raise awareness and provide customers with the necessary tools and knowledge to protect their accounts and personal information from unauthorized access and fraudulent transactions.

In a proactive move to further secure its payment ecosystem, Wema Bank took stringent measures against several of its fintech partners. In the same month that the losses were reported, the bank identified and removed up to seven fintech partners from its payment gateway platform. These partners were suspended due to their involvement in fraudulent activities, demonstrating the bank’s zero-tolerance policy towards any form of compromise on its platform.

These actions, together with the implementation of Daon’s facial recognition technology, signify Wema Bank’s commitment to combating fraud and enhancing the security of its digital banking services. By taking a multi-faceted approach that includes technological innovation, team expansion, customer education, and strict enforcement of compliance standards, Wema Bank is working to ensure a safe and secure banking environment for all its customers.

Clive Bourke, who holds the position of President for the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions at Daon, expressed his views on the partnership with Wema Bank. He emphasized that the integration of Daon’s comprehensive suite of identity verification and authentication solutions into the Wema Bank app is set to revolutionize the customer experience. According to Bourke, customers will benefit from a more streamlined and dependable user experience, which will be achieved without compromising the security of their personal data.

Bourke highlighted the significance of this technological advancement by pointing out that identity fraud is a major concern in the banking industry, leading to substantial financial losses. He stressed the importance of defending against such threats, asserting that robust identity verification and authentication mechanisms are crucial in the fight against financial fraud.

Echoing Bourke’s sentiments, Olusegun Adeniyi, the Chief Digital Officer at Wema Bank, reinforced the bank’s commitment to its mission of providing seamless access to an extensive range of financial services. Adeniyi underscored that the adoption of Daon’s technology is a strategic move that aligns with the bank’s goal to enhance customer experience and security. He suggested that the development is not only a response to the immediate challenge of fraud but also a proactive step towards maintaining the bank’s reputation as a provider of secure and efficient digital banking services.

Together, the statements from both Daon and Wema Bank leadership reflect a shared vision of leveraging cutting-edge technology to safeguard customer data and transactions, thereby fostering trust and confidence in the digital banking landscape.