While acknowledging the enormous economic and social advantages of transitioning to a cashless economy, it is equally vital to be cognizant of the concomitant and detrimental issues that surround it. One of the most serious concerns leveled against a cashless society is that it leaves you more exposed to fraud and identity theft, both of which can only be avoided but with extra care. Since Nigerians are culturally unaccustomed to digital transactions, even well-educated individuals are vulnerable to phishing scams. Given the growing prevalence of online fraud, the risk of cybercrime might be on the increase as more individuals use the digital platform.
Dotun Adediran, associate director, ICT platforms, KPMG, commented on the development, emphasizing the significant danger of cybercrime as the nation transitions to a cashless economy. He made the remarks at a panel discussion on the ‘push towards a cashless economy, data and analytics, and blockchain’ at the KPMG Audit Committee seminar in Lagos. In his talk, Adeniran emphasized the potential threat that cybercrime may pose to the widespread use of digital platforms and cashless transactions.
Contactless payments would boost Nigeria cashless economy.
A recent analysis by Checkpoint Research claims that every week, 2,308 cyberattacks occur across all sectors in Nigeria, targeting companies. According to the data, cybercrime in Nigeria rose by 174 percent in the first half of 2022. This increase in cybercrime has been made possible by the widespread use and reliance on digital technologies in the corporate world over the last several years. Compared to Sweden, which has a more robust cashless adoption and internet penetration, Adediran noted that cashless adoption in Nigeria is not smooth, with just 51% internet penetration.
He went on to say that in order for the payment infrastructure to progress, it must become increasingly contactless. Contactless payment is critical since many payments are primarily dependent on the internet and connection. He believes that contactless payments would help Nigeria move quicker toward a cashless economy. Notwithstanding all of the drawbacks associated with the cashless economy, figures provided by the Nigeria Inter-Bank Settlement System (NIBSS) reveal that electronic payments reached an all-time high of N42 trillion in December 2022.
Numbers of agencies offering banking services have increased.
This is a 52 percent increase from December 2021. In addition, NIBSS estimates that the overall number of transactions will increase from 3.4 billion in 2021 to 5.1 billion in 2022, reflecting a 50% increase over the previous year. Payment infrastructure is also dispersed unevenly. Adeniran claimed individuals in remote areas need affordable access to money and technology. He said that financial inclusion and access to numerous financial products are some of the advantages of the cashless approach.
Also, he said that if most market women’s transactions are handled digitally, they would have easier access to credit and cover from the insurance and lending industries. Lawrence Amadi, partner and head of technology Assurance & CFO advisory at KPMG noted that there has been a significant uptick in the number of agencies offering banking services. A whopping 1.6 million agency banks, up from a mere 70,000 in 2018, are vying for business with the people and working class in 2023. Amadi warned that a rise in agency banks may encourage the growth of the illicit market if rural communities were denied access to banking services.
Secure cyberspace is crucial to fully harness the digital age potential.
In their responsibilities as digital and cyber risk managers, the majority of the event’s attendees, the board’s audit committee, were endeavoring to guarantee that cyber risk is explicitly addressed in the organization’s risk management framework. Even so, Amadi urged the gathering to strengthen compliance at all levels of the organization and raise the profile of cyber security at the very top. Although cyberspace’s anonymity gives room for perpetrators to lurk in digital shadows wreaking unwary havoc, a trusted and secure cyberspace is crucial to fully harness the digital age potential.
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