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Global analytics leader SAS have hosted a Summit in Lagos, focused on enabling a new era of financial services in Nigeria

SAS experts, industry leaders and policymakers attended the Summit to share insights and solutions to drive financial inclusion in the country while minimising fraud and other risks.

A lack of infrastructure, challenging geography and financial exclusion from the formal economy have created barriers to traditional financial services models in Africa. Innovation and digital transformation have driven the rapid expansion of financial services across the continent, especially over mobile devices by telecommunications providers, bringing transactional power to customers in the most rural areas.

However, digital disruption to meet changing customer needs has also opened up new avenues for financial criminals to exploit. The event shed light on the tools and platforms that allow financial services organisations to strike the optimal balance between meeting their growth objectives and reducing risk.

Nearly 36% of adult Nigerians still do not have access to financial services to conduct digital payments, access credit and ease operating conditions for small businesses. The country’s Central Bank’s deployment of its first digital currency, the E-Naira, reflects the government’s commitment to providing a reliable channel for remittance flows and cross-border payments.

“There is no doubt that the digitalisation of financial services will boost financial inclusion and benefit Africa’s people, but many competitors face challenges in identifying and combating fraud. The problem is that it is impossible for humans to proactively monitor transactional activity and trends to tackle financial crime. No organisation has enough human resource capacity,” said Babalola Oladokun, regional lead for SAS in Nigeria.

“Globally, since the onset of Covid-19, we have seen a spike in sophisticated financial crime, including social engineering, malicious use of AI, identity theft, payment fraud and SIM swapping. Data and analytics are the only viable tools to combat this surge, by providing financial institutions with automated algorithms that incorporate a cross-channel view of customer behaviour and geolocation of users to spot complex fraud trends.”

Stephan Wessels, SAS head of customer advisory for South Africa, commented, “The benefit of being able to scale the business quickly is, unfortunately, the fraudster’s avenue for exploitation. Lockdown restrictions and working from home have suddenly exposed organisations and employees to technologically advanced fraudsters who are also scaling their own operations using cloud-based technologies.”

Machine learning methods that include deep learning neural networks are proving to be more accurate and effective than rules-based approaches.

“AI provides the capability to learn from complex data patterns and interactions to create holistic views of customer activity that continue to strengthen defences. Analytically driven business decisions are better decisions. The real clincher for financial services institutions is that analytics can help them understand their customers better, bringing benefits beyond fraud prevention,” concluded Wessels.

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