The Managing Director and Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, has called for the adoption of Artificial Intelligence (AI) technologies to strengthen fraud detection mechanisms in the nation’s financial sector.

Speaking at the Risk Management Roundtable organized by FITC, Mr. Hassan highlighted the limitations of traditional fraud detection methods reliant on manual verification and human analysis.

He proposed the integration of advanced AI tools like Machine Learning (ML), Natural Language Processing (NLP), and Anomaly Detection as transformative solutions to address the growing sophistication of financial fraud.

“AI can process vast amounts of data in real-time, identify unusual patterns, and detect emerging threats long before they cause significant harm,” Mr. Hassan stated.

Enhancing Fraud Detection Capabilities

Elaborating on the potential benefits of AI, he noted its capacity to identify irregular transactions, such as large withdrawals from new geographic locations, and initiate protective actions like freezing accounts or alerting stakeholders. AI’s ability to analyze extensive datasets and consider multiple factors can reduce false positives, allowing financial institutions to focus on genuine threats.

Mr. Hassan also underscored the importance of AI in tracking cross-border transactions and analyzing user behaviors, such as typing patterns and device usage, to combat identity theft and account takeovers.

Regulatory Oversight and Ethical Standards

While championing AI’s adoption, the NDIC MD emphasized the need for robust regulatory frameworks to ensure the ethical and transparent use of AI technologies.

He praised the Federal Ministry of Communications, Innovation, and Digital Economy for drafting Nigeria’s first National Artificial Intelligence Strategy (NAIS), a blueprint aimed at leveraging AI sustainably and ethically.

“Financial regulators and supervisors must ensure public trust by guaranteeing that AI technologies reinforce stability without infringing on data privacy or consumer rights,” he said.

Globally, organizations like the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS) are also advancing guidelines for AI adoption in financial services.

Addressing Fraud Spike

Mr. Hassan’s remarks come against the backdrop of rising fraud cases in the Nigerian banking sector. According to FITC’s Q3 2024 fraud and forgery report, Nigerian banks recorded a 65% increase in fraud cases, from 11,532 in Q2 to 19,007 in Q3. The amount involved surged by 105% to N115.9 billion in Q3, up from N56.6 billion in the previous quarter.

Despite the spike in reported cases, the actual losses declined significantly. Only N10.1 billion was lost to fraudsters in Q3, a 75.4% drop from the N42.8 billion recorded in Q2.

Challenges and the Path Forward

While acknowledging the transformative potential of AI, Mr. Hassan cautioned against challenges such as compliance with data protection regulations like the Nigeria Data Protection Regulation (NDPR) and safeguarding AI systems against cyber-attacks. He also stressed the need to eliminate bias in AI models to maintain fairness and public trust.

“Transparency in AI decision-making is essential. Regulators must establish frameworks to monitor AI systems and ensure they operate ethically and in line with legal standards,” he stated.

He urged stakeholders to prioritize collaboration within the financial industry to address fraud effectively and responsibly integrate AI technologies.

The roundtable concluded with a consensus on the need for synergy between regulatory bodies and financial institutions to combat the escalating fraud threat while embracing technological advancements.

The post NDIC Advocates AI Integration to Combat Fraud in Nigerian Financial Institutions appeared first on Tech Digest News.

By Fom Gyem

The Arewa Economic Forum (AEF) has commended President Bola Ahmed Tinubu, for his decision to retain some of the best heads of agencies in the Finance and ICT sectors who are from the North.

Addressing a press conference in Abuja on Wednesday, the Chairman of the Forum, Alhaji Ibrahim Shehu Dandakata, commended the President for his decision to retain Bello Hassan of the Nigeria Deposit Insurance Corporation (NDIC) and Kashifu Inuwa of the National Informational Technology Development Agency (NITDA),

The Chairman highlighted the importance of recognizing and appointing competent and experienced technocrats from the Northern region to lead critical sectors of the economy.

READ ALSO: Training 1 Million Nigerians in Technical Skills by 2025

Hassan’s NDIC has been recognized locally and globally for its diligent efforts in repositioning insurance practices in the country. Under his leadership, NDIC conducted a review of the maximum deposit insurance coverage, aligning with international standards set by the International Association of Deposit Insurers (IADI).

The MacArthur Foundation’s acknowledgment of NDIC’s efficient service delivery further underscores Hassan’s adept management.

NITDA under Inuwa has also successfully deployed 601 digital infrastructural facilities across the country and these include Digital Economy Centers, e-learning facilities, and various IT hubs.

The NITDA boss has also ensured that the Computer Emergency Response and Readiness Centre (CERRC) was upgraded to enhance cybersecurity and protect federal institutions from cyber threats.

Inuwa’s leadership saw the deployment of the National Public Key Infrastructure (PKI) for enhanced online security and the launch of Nigeria’s first digital Fabrication Laboratory (FabLab 1.0) to boost indigenous digital innovation.

The AEF therefore urged President Tinubu to remain steadfast in his commitment to retaining the best-performing Northerners and also appointing more capable individuals from the North to head strategic agencies under his watch.

The post Arewa Economic Forum Commends Tinubu for Retaining NDIC, NITDA Bosses By Fom Gyem appeared first on Tech Digest News.