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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Africa»Wema Bank discontinues collaboration with seven fintech associates due to alleged fraudulent conduct

    Wema Bank discontinues collaboration with seven fintech associates due to alleged fraudulent conduct

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    By Tapiwa Matthew Mutisi on April 18, 2024 Africa, Banking, Business, Financial Services, Fintech, Fraud, Infrastructure, News, Nigeria, Report

    In an assertive move to tackle fraudulent activities, Wema Bank, recognized as one of Nigeria’s key commercial financial institutions, has taken decisive action against several fintech collaborators connected to its payment gateway platform. The bank’s stringent decision led to the expulsion of three fintech firms and the suspension of four others after they were linked to illicit activities.

    In the previous year, Wema Bank confronted substantial financial adversity, acknowledging a significant loss of around ₦685 million (approximately $595,000), attributed to deceitful activities, including fraud and forgery. In response to these financial malpractices and to safeguard its clientele, the bank initiated a robust anti-fraud campaign.

    The campaign was kick-started following observations of an alarming uptrend in fraudulent transfers funneled into some wallet accounts that are operated by a number of Wema Bank’s fintech associates through the use of third-party wallet accounts provided by the bank.

    An extensive investigation was conducted, which led to the clear identification of the responsible fintech entities. In the course of actions taken, Wema Bank has also imposed rigorous audits and further examinations of the operational procedures employed by its fintech partners. The objective is to ensure that the activities of these partners align with the bank’s ethical standards and fulfill the desired outcomes.

    This vigilant approach taken by Wema Bank is indicative of its commitment to fostering ethical partnerships, implementing stringent regulatory measures, and complying with the Central Bank of Nigeria’s Know-Your-Customer policies.

    Central to the anti-fraud campaign is the drive to enhance awareness among customers about fraudulent schemes that could impact their bank accounts. The initiative also focuses on educating clientele on how to detect and avoid fraud, thereby empowering them with the necessary knowledge to protect their financial assets.

    Oluwole Esomojumi, Wema Bank’s Chief Audit Executive, has advised that customers will benefit from the provided information, which aims to help them recognize and counteract the increasingly sophisticated strategies employed by fraudsters.

    “We’re consistently ahead of the curve, which is evidenced by our thorough investigations into our fintech partners. Those found to be engaged in fraudulent practices have been disconnected from our payment gateway,” Oluwole remarked.

    The bank has also reportedly stepped up its security monitoring procedures, with a firm resolve to eliminate any fraudulent activities.

    In the past year, Wema Bank suffered a substantial loss of ₦685 million due to fraudulent incidents and forgery. Notably, another major bank, Access Bank, incurred a much higher loss of ₦6.15 billion over the same period.

    Amid these challenges, Wema Bank is increasing the stringency of its oversight on fintech collaborations. Meanwhile, electronic payment transactions in Nigeria saw a remarkable surge in the first quarter of 2024. According to the Nigeria Inter-Bank Settlement Systems (NIBSS), there was an 89% increase in e-transactions, reaching a total value of ₦234 trillion in Q1 2024. This growth was maintained consistently month-over-month.

    Mobile money operators (MMOs) in Nigeria, including industry players like OPay and PalmPay, have also experienced a significant uptick in transaction volumes, which tallied up to ₦17.2 trillion in the first quarter of 2024. This positive trajectory in digital transactions underscores the importance of robust security measures to protect the financial ecosystem.

    Wema Bank incurs $595,000 loss to fraudulent activities in 2023, initiates campaign to combat fraud

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    Africa Banking Business Collaborations Financial service fintech Forgery Fraud Investments nigeria Payments Technology Wema Bank
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    Tapiwa Matthew Mutisi
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    Tapiwa Matthew Mutisi has been covering blockchain technology, intelligent technologies, cryptocurrency, cybersecurity, telecommunications technology, sustainability, autonomous vehicles, and other topics for Innovation Village since 2017. In the years since, he has published over 4,000 articles — a mix of breaking news, reviews, helpful how-tos, industry analysis, and more. | Open DM on Twitter @TapiwaMutisi

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    1 Comment

    1. Pingback: Wema Bank bolsters platform security with facial recognition technology following ₦685 million fraudulent losses - Innovation Village | Technology, Product Reviews, Business

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