Empowering Nigeria's Defense Against Financial Predators: An Unyielding Battle for Innocent Families
Aderogba Otunla, Ph.D.
Managing Director | Google Workspace Expert for Emerging Markets
The Consumer Protection Department (CPD) within the Central Bank of Nigeria (CBN) can utilize the following list as a guideline for assisting innocent families who have fallen prey to these financial predators, particularly the families of the esteemed mathematician, Abada Atubase. I am confident that such measures will provide a semblance of solace to his family and other victims.
It would be advantageous to:
(a) Amplify understanding of the risks associated with fraud and financial crimes.
(b) Enlighten the citizenry on measures to safeguard themselves from fraud and monetary malfeasance.
I trust that by implementing these strategies, the CPD and the CBN will not only alleviate the suffering of victims' families but also forestall future attempts by unscrupulous individuals to exploit others.
(A) SITUATIONS, DETECTION METHODS, POSSIBLE COUNTERMEASURES
1. Situation - Misuse of a Deceased Staff Member's Identity: `AW` exploits the identity of a deceased staff member to establish a bank account for storing illicit funds.
Detection Method - Watch for accounts associated with the identity of a deceased staff member.
Possible Countermeasure - Banks should enhance identity verification and promptly report dubious activities.
2. Situation - Setting up a Fake Bank Account: `AW` misuses the identity to establish a bank account intended for money laundering.
Detection Method - Check for accounts associated with the deceased staff member, particularly those set up after the staff member's demise.
Possible Countermeasure - Banks should validate the identity and verify the customer's existence before account creation.
3. Situation - Fraudulent Loans: `AW` seeks loans or credit using the deceased individual's identity.
Detection Method - Scrutinize the deceased's credit reports to detect any unauthorized credit or loan requests.
Possible Countermeasure - Lending institutions should cross-reference with death records before sanctioning loans or credit.
4. Situation - Procurement of Goods/Services: `AW` employs the deceased's identity to procure goods or services on credit.
Detection Method - Keep an eye on new credit card charges or accounts initiated after the individual's death.
Possible Countermeasure - Credit card companies and businesses should verify with death records.
5. Situation - Mortgage or Property Fraud: `AW` uses the deceased person's identity to secure a mortgage or sell property.
Detection Method - Look for property dealings involving the deceased individual post their demise.
Possible Countermeasure - Mortgage providers and property registries should cross-verify with death records.
6. Situation - Identity Cloning: `AW` adopts the deceased's identity, using it to acquire new passports, etc.
Detection Method - Look for multiple active identities sharing identical personal data.
Possible Countermeasure - Enforcement agencies should utilize biometric data to confirm identities where feasible.
7. Situation - Employment Fraud: `AW` uses the deceased's identity to apply for jobs, evade background checks, or fabricate an employment history.
Detection Method - Look for employment records or job applications under the deceased's name post their demise.
Possible Countermeasure - Potential employers should cross-reference with death records during recruitment.
8. Situation - Fabricating a Marriage: `AW` could orchestrate a false marriage with the deceased to gain access to benefits or residency rights.
Detection Method - Look for marriage records involving the deceased individual post their death.
Possible Countermeasure - Marriage registries should cross-verify with death records.
9. Situation - Establishing a Charitable Organization: `AW` misuses the deceased's identity to launch a charitable organization and divert donated funds.
Detection Method - Be vigilant for organizations registered post the individual's death, particularly those with questionable transactions.
Possible Countermeasure - Regulatory bodies should cross-reference with death records prior to approving new organizations.
10. Situation - Shell Company: `AW` uses the deceased's identity to establish a shell company for money laundering.
Detection Method - Be watchful for companies registered post the person's death, particularly those involved in dubious transactions.
Possible Countermeasure - Business registries should cross-verify with death records before permitting new registrations.
11. Situation - Phantom Employees: `AW` adds the deceased person as an employee of the church to collect their salary.
Detection Method - Check for payroll records bearing the deceased's name post their death.
Possible Countermeasure - Implement rigorous identity and life verification for new employees.
12. Situation - Overstated Expense Claims: `AW` submits deceptive expense claims under the deceased's name, pocketing the reimbursement.
Detection Method - Monitor for expense claims made under the deceased's name following their death.
Possible Countermeasure - Strengthen control over expense claim verification.
13. Situation - Money Mule: `AW` might exploit the deceased person's bank account to receive and disburse illegal funds, making them difficult to trace.
Detection Method - Look for frequent large transfers in and out of the deceased person's account.
Possible Countermeasure - Banks should regularly cross-reference accounts with death records and scrutinize suspicious transactions.
14. Situation - Inheritance Scam: `AW` may falsely claim that the deceased left a large sum of money which needs payment of fees for release.
Detection Method - Look for communications or payment requests related to a supposed inheritance from the deceased.
Possible Countermeasure - Raise public awareness about inheritance scams and prompt them to report suspicious communications.
15. Situation - Offshore Accounts: `AW` exploits the deceased's identity to open offshore bank accounts to conceal illicit funds.
Detection Method - This can be challenging to detect, but might be found by monitoring transactions involving offshore banks.
Possible Countermeasure - Banks should authenticate identity and proof of life before opening new accounts, and authorities should scrutinize suspicious offshore transactions.
16. Situation - Real Estate Fraud: `AW` employs the deceased's identity to buy or sell real estate, potentially for money laundering purposes.
Detection Method - Monitor for real estate transactions in the deceased's name, especially if the properties are connected to `AW` or the church.
Possible Countermeasure - Real estate registries should cross-verify with death records and authenticate identity before authorizing transactions.
(B) UNRAVELING TACTICS: HYPOTHETICAL SCENARIOS AND THEIR LIKELIHOOD
Taking into account all conceivable situations, including intersecting ones, here is a compendium of the most probable circumstances. Keep in mind, these are hypothetical scenarios, and the details can vary significantly based on individual cases.
1. A living individual initiates new bank accounts using their existing BVN.
2. A living individual enrolls new phone numbers using their current SIM-NIN.
3. A living individual establishes new bank accounts and enrolls new phone numbers using their current BVN and SIM-NIN.
4. A deceased individual's BVN is utilized to initiate new bank accounts.
5. A deceased individual's SIM-NIN is deployed to enroll new phone numbers.
6. A living individual's SIM-NIN is employed to enroll new phone numbers while new bank accounts are initiated using a deceased individual's BVN.
7. A living individual's BVN is utilized to start new bank accounts while new phone numbers are enrolled under a deceased individual's SIM-NIN.
8. New bank accounts are initiated and new phone numbers are enrolled using a deceased individual's BVN and SIM-NIN.
9. A living individual's BVN and a deceased individual's SIM-NIN are used to initiate new bank accounts and enroll new phone numbers.
10. A living individual's SIM-NIN and a deceased individual's BVN are employed to enroll new phone numbers and initiate new bank accounts.
11. A deceased individual's BVN is employed to initiate new bank accounts while a living individual enrolls new phone numbers using their current SIM-NIN.
12. A deceased individual's SIM-NIN is used to enroll new phone numbers while a living individual initiates new bank accounts using their current BVN.
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13. A living individual's BVN is used to start new bank accounts while new phone numbers are enrolled under a different living individual's SIM-NIN.
14. A living individual's SIM-NIN is utilized to enroll new phone numbers while new bank accounts are initiated under a different living individual's BVN.
15. A deceased individual's BVN is used to initiate new bank accounts while new phone numbers are enrolled under a different deceased individual's SIM-NIN.
16. A deceased individual's SIM-NIN is employed to enroll new phone numbers while new bank accounts are initiated under a different deceased individual's BVN.
17. A living individual's BVN is used to start new bank accounts and new phone numbers are enrolled under a different deceased individual's SIM-NIN.
18. A living individual's SIM-NIN is utilized to enroll new phone numbers and new bank accounts are initiated under a different deceased individual's BVN.
19. A deceased individual's BVN is employed to initiate new bank accounts and new phone numbers are enrolled under a different living individual's SIM-NIN.
20. A deceased individual's SIM-NIN is used to enroll new phone numbers and new bank accounts are initiated under a different living individual's BVN.
(C) ADDITIONAL INSIGHTS AND ASSUMPTIONS USING THE POPULATION OF 220 MILLION NIGERIANS
1. Some Stats:
- As of March 2023, there are over 190 million active mobile phone lines in Nigeria.
- Of these, over 140 million have been linked to NINs.
- This means that over 30% of mobile phone lines in Nigeria are still not linked to NINs.
- The NCC has set a deadline of June 30, 2023 for all mobile phone lines to be linked to NINs.
- If you do not link your SIM card to your NIN by June 30, 2023, you may be barred from making calls, sending text messages, or using the internet.
- The NCC has also said that it will be working with the Nigerian Police Force to track down and prosecute those who are using unregistered SIM cards for criminal activities.
- The SIM-NIN program is a major step forward for Nigeria in the fight against crime and terrorism. It is also a major step forward in the country's efforts to bring its telecommunications sector into the 21st century and to make it more secure.
- As of March 2023, there are over 54 million BVNs registered in Nigeria. This means that over 54 million Nigerians have enrolled for a BVN. The CBN has set a target of enrolling 100 million Nigerians for a BVN by the end of 2023.
- The BVN is a valuable tool for improving the security of the Nigerian banking system. It is a major step forward in the fight against fraud and financial crimes.
- As of March 2023, there are over 134 million active bank accounts in Nigeria.
- This means that over 134 million Nigerians have at least one bank account.
- The number of active bank accounts in Nigeria has increased by over 69 million since 2016.
- The increase in the number of active bank accounts is due to a number of factors, including the growth of the Nigerian economy, the rise of mobile banking, and the government's efforts to promote financial inclusion.
- The Central Bank of Nigeria (CBN) has set a target of increasing the number of active bank accounts in Nigeria to 200 million by 2025.
- The increase in the number of active bank accounts is a positive development for the Nigerian economy. It will help to improve financial inclusion, which will lead to increased economic growth. It will also help to reduce poverty and inequality.
2. So, let's consider the three main contexts provided:
(a) SIM-NIN linkage
(b) BVN registration
(c) Active bank accounts
3. Here's the table summarizing the current status and the gaps:
(a) SIM-NIN Linkage:
(b) BVN Registration:
(c) Active Bank Accounts:
4. The list above gives a clear idea of the gaps present in the current system.
(i) For SIM-NIN linkage, there are still 80 million people who need to link their SIM cards with their NINs.
(ii) For BVN registration, the gap is much larger with 166 million people who still need to register for a BVN.
(iii) Lastly, for active bank accounts, there are still 86 million people who need to open a bank account to achieve the government's target of 200 million active bank accounts by 2025.
It is important to note that these gaps represent opportunities for both the government and private sector to expand services and improve financial inclusion. They also represent the challenges that need to be overcome to prevent potential misuse involving the identity of a deceased individual.
The AI system outlined in the previous steps can play a significant role in addressing these gaps and providing a more secure environment for financial and telecommunication transactions in Nigeria.
5. The AI system can address these gaps and improve the security of financial and telecommunication transactions in Nigeria in the following ways:
SIM-NIN Linkage (80 million):
a. Anomaly Detection: The AI system can analyze the patterns of phone usage and identify unusual activities, like new registrations or multiple numbers registered under a single NIN, that could be related to fraudulent activities or identity theft.
b. Predictive Analysis: The AI can predict potential misuse by cross-referencing the patterns of phone usage with the registered NINs, identifying users who have not linked their SIMs, and prioritizing them for outreach or enforcement actions.
c. Monitoring and Compliance: AI can be used to automatically monitor the progress of SIM-NIN linkage, identifying trends, and providing insights to help the government and telecom operators improve their strategies and achieve the target deadline.
BVN Registration (166 million):
a. Fraud Detection: By analyzing transaction patterns, the AI system can identify suspicious activities related to unregistered BVNs or accounts that could be associated with financial crimes.
b. Risk Assessment: AI can assess the risk level of bank customers who have not registered for BVNs, helping banks prioritize their efforts in getting customers to enroll.
c. Customer Outreach: AI-driven customer segmentation and targeted marketing campaigns can be used to increase the enrollment rate by identifying and reaching out to the unregistered customers with tailored messages and incentives.
Active Bank Accounts (86 million):
a. Financial Inclusion: AI can analyze various socioeconomic and demographic factors to identify unbanked populations and the reasons for their exclusion, helping banks and the government devise targeted strategies for expanding financial services.
b. Customized Products: AI can be used to develop personalized financial products and services for different segments of the unbanked population, improving the likelihood of their adoption and increasing the number of active bank accounts.
c. Tracking Progress: AI can track the progress towards the target of 200 million active bank accounts, providing insights and recommendations to optimize the efforts of banks and the government.
By implementing these AI-driven strategies, Nigeria can effectively address the gaps in SIM-NIN linkage, BVN registration, and active bank accounts, while simultaneously improving the security of financial and telecommunication transactions in the country.
6. AI systems can be effectively used to dynamically update information by integrating and analyzing data from multiple agencies.
This involves creating a centralized system that can communicate with various databases, gather the required data, and then use AI algorithms for data cleaning, validation, updating, and analysis.?
Here's how it can be done for each of the gaps:
(a) SIM-NIN Linkage (80 million):
Leveraging databases from telecom providers and the National Identity Management Commission (NIMC), the AI system can periodically cross-verify the NIN linkage status of each SIM card. For instance, if a new NIN is registered with the NIMC, the system can automatically check if this NIN is linked with any SIM cards and update the status accordingly.
Example: Let's say Mr. A just got his NIN and linked it with his SIM. The AI system can identify this new linkage from the telecom provider's database and update the NIN-SIM linkage database, reducing the number of unlinked SIMs by one.
(b) BVN Registration (166 million):
AI can use databases from all registered banks in Nigeria, managed by the Central Bank of Nigeria (CBN), to check for new BVN registrations. If a new BVN is registered, the system can cross-verify the customer's details with the bank's database and update the BVN registration status.
Example: If Ms. B opens a new bank account and registers for a BVN, the AI system can detect this new registration from the bank's database and update the BVN database, decreasing the number of unregistered BVNs.
(c) Active Bank Accounts (86 million):
The AI system can use the databases from all banks to periodically check for new or reactivated bank accounts. If a previously inactive account starts showing regular transactions, the system can update its status to 'active'.
Example: If Mr. C, who had a dormant account, starts transacting regularly, the AI system can identify this change from the bank's transaction data and update the active bank accounts database, increasing the number of active bank accounts.
In all these scenarios, AI plays a critical role in keeping the databases updated in real-time, helping Nigeria to close the gaps in SIM-NIN linkage, BVN registration, and active bank accounts.
Thank you.
Aderogba Otunla