Nigeria Needs 45,000 ATMs To Check Fraud – Experts

Deposit Money Banks urgently need to deploy 45,000 additional Automated Teller Machines across the country if they are to curb financial crimes associated with ATM usage, experts at the Computer Warehouse Group have said.
The firm’s Chief Executive Officer, Austin Okere, and the Chief Technical Officer, Mr. James Agada, said on Thursday that the Central Bank of Nigeria’s ATM national requirement pegged at 60,000 had only been met with about 15,000 units, thereby leading to congestion and fraud at various points where they were available.
Agada said, “Not less than 60,000 ATMs are needed, but we have only 15,000. The number of people who have cards is increasing and our ATMs are working so much that they break down easily; thereby resulting in crowds at the few available ones.

“The ATM thieves take advantage of the crowd stampede to criminally assist unsuspecting customers, and in the process revise their passwords, or steal their ATM cards by smartly exchanging them, and then pilfer their money by making transfers through the Quickteller service, among other manipulations.”
Agada added that despite the Nigeria Deposit Insurance Corporation’s report showing that fraud cases perpetrated using ATMs and other card payment systems rose in 2015 by 11.95 per cent, the percentage of users of the technology in the country far exceeded that of the United States, the United Kingdom and Ghana.
The CWG’s chief technical officer explained, “Despite all these, as far as ATM security is concerned, Nigeria is more secure compared to places like the US, the UK and Ghana. In Nigeria, we have many measures being deployed to curb the problem of ATM-related fraud.

“We also have PIN-shield, security cameras, mirrors, encryption technology, anti-phishing devices fixed on the ATM and we are not resting on our oars.
“There is nowhere you carry out transactions without the risk of some likely fraudulent potential. Recall that the Central Bank of Bangladesh was scammed and lost $80m to fraud, which has gone untraced till date. So, if these fraudsters could compromise the system of a central bank, no one is spared.
“Bearing this reality in mind, the truth is that there is no absolute security because these technologies keep evolving; hence it is key to ensure that the good technology solutions stay ahead of the bad.”
Agada said that despite the funds spent by banks to maintain their ATMs, it was disappointing that most of the machines were still having the problem of non-dispense of cash, “which is unconsciously forcing customers into the hands of fraudsters who pretend to assist them when they experience technical glitches.”
According to him, an average Nigerian bank currently spends about N637,047 on a monthly basis over five years on ATM outright purchase, which is N38m over five years.

“Whereas, there are technologies that can help the banks save a minimum of 20 per cent in comparison. For instance, we know for sure that there are certain companies that can offer the banks N509,638 on a monthly basis over five years, which is N31m over five years,”Agada added.
Okere said that the situation had been worsened due to the banks’ poor distribution of ATMs, “with most of them concentrated around the 5,000 odd bank branches.”
He said, “Going by the statistics of the Central Bank of Nigeria that there are 15,000 ATMs in the country, and following the trend of at least two ATMs per branch, this leaves only 2,000 ATMs to be distributed across all the other locations requiring cash dispensing in Nigeria.

“Typically, ATMs should be liberally placed around high traffic areas such as malls, markets, petrol stations, etc. The realities of distributing only 2,000 ATMs across all these areas are quite stark: not enough to go round, barely enough to provide two ATMs each to the 774 local government areas.”
Okere also said that this had led to the poor penetration of ATMs where they existed, adding that the problem could be solved by providing appropriate number of ATMs per location based on a study of the queues.
He said that if the intention was to keep the customers from crowding the banking halls, “it seems to me a circular argument bickering about the ATM and support costs.”
“This has to be compared with the cost of a bigger branch and more tellers, with their attendant salaries and benefits should the customers be compelled to go into a branch for lack of adequate ATM channels,” he added.

August 01, 2016