Cyber Security Arrangements in Developing Countries_ an Inquiry on Banking Sector in Nigeria (GC01434)

1.0 Introduction

1.1 Research background

Technological development has improved daily life in areas such as online banking and shopping. The digital domain has become an important factor in the world and information and communication technology has proved to be a very vital factor in productivity, growth and innovation (Rosewarne, 2014). In recent years, the world has greatly developed technologically and the development has also affected accounting practices (Ernst and Young, 2013). However, cyber-security has now been a complex transnational issue due to the growing proliferation of information and communication technologies (ICTs) and the increasing opportunity for globalization (Kundi and Nawaz, 2016). A study by Norton in 2011 revealed that threats to cyberspace have been increasing dramatically more than ever before, whereas now about 431 million adult victims globally in a year- or 1 million cybercrime victims every day, and 14 adult victims every second (Natarajan, 2016). Another study by United Nations (2011) disclosed that cybercrime is now one of the bigger global issues that affect millions of people, governments of every nation, and countless businesses losing trillion dollars in a year through intellectual property, identify thefts and online fraud.

1.2 Problem statement

The growth of the information and communication technology environment is accompanied by new and serious threats. Cyber-attacks now have the ability to greatly harm society in new and critical ways. Online fraud and cyber-attacks are just a few examples of computer-related crimes that are committed on an extremely large scale every day (Gercke, 2016). For a long time, cyber-crime has tarnished Nigerian international reputation and greatly discouraged foreign investors. The phenomenal rise of mobile communication and the drive from the Central Bank of Nigeria towards a cashless economy has contributed to the growth of cyber-crime. Odunfa (2014) opines that the financial damages incurred by cyber-attacks are reported to be very high and rapidly increasing. According to a report by Nigeria’s inter-bank settlement systems, Nigerian banks have lost NGN 159 billion between 2015 and 2013 to cyber-crime and according to Nigeria-based information and communications technology company New Horizons Limited, NGN 413 billion (USD 2.5 billion) is being lost annually to cybercrime. Although this financial cost can be measured, the cost in human misery and tragedy is incalculable and now it is costing more than physical crime (Ali et al., 2014). The need to improve cybersecurity and protect critical and delicate information is extremely necessary for every nation’s security and economic well-being.

1.3 Research rational

There are few innovations that have changed the dynamics of banking as much as the e-banking revolution. Throughout the world, banks are reorganizing their business strategies to take advantage of new business opportunities offered by e-banking. Electronic banking is believed to have started in the early 1980s. It has since then been growing in an unprecedented dimension in line with the growth in ICT development. E-banking has enabled banks to overcome borders, adopt a strategic outlook, and bring in new possibilities. According to Nitsure (2013), information communication technology has reduced the cost of processing and facilitating the transmission of information leading to drastic changes in the banking business. It is worth noting that e-banking has not been limited to advanced countries, but is found even in countries with underdeveloped e-banking systems, as a result of the many new business opportunities offered by e-banking.  E-banking technology created a revolution by extending banking hours beyond office hours and beyond national boundaries (Balachandran and Balachandher, 2015). In Nigeria, several studies on e-banking have been done. Chiemeke et al. (2016), for instance, conducted a pragmatic study on the adoption of e-banking where major hindering factors to Internet banking adoption such as insecurity and inadequate operational facilities and cyber crimes were identified.

1.4 Research questions/aims

Aims

The proposed study aims to assess the cyber-crime scenarios and electronic crimes in the banking sector of Nigeria and to take some precautionary measures and develop a conceptual framework about the problems of cyber-crime. Then, the proposed study aims to represent the concept of basic crimes that occurred in the banking sector of Nigeria.

Objectives

• To identify cybercrimes and electronic crimes faced and might be faced in the future by the banking sector in developing countries including Nigeria
• To build awareness for the banking sector of developing countries (including Nigeria) at the international policy level with the current situations as well as challenges regarding cybersecurity
• To explore options for the banking sector in developing countries (including Nigeria) for global responses to rising cybercrime
• To identify the practice policies and initiatives in place across the world for the financial institutions in developing countries (including Nigeria) to build a cybersecurity culture?
• To suggest precautionary measures for the banking sector of developing countries to develop a conceptual framework about cybercrime challenges

1.5 Research questions

1. What kind of cybercrimes and electronic crimes is being faced and might be faced in the future by the banking sector in developing countries including Nigeria?
2. How can the banking sector of developing countries (including Nigeria) build awareness at the international policy level with the current situations as well as challenges regarding cybersecurity?
3. What options are available for the banking sector in developing countries (including Nigeria) for global responses to rising cybercrime?
4. What practice policies and initiatives are in place across the world for the financial institutions in developing countries (including Nigeria) to build a cybersecurity culture?
5. What precautionary measures can be taken by the banking sector of developing countries to develop a conceptual framework about cybercrime challenges?

2.0 Literature review

2.1 Concept of cyber crimes

The term ‘cybercrime’ is defined by experts in different ways. According to Douglas and Loader (2015), cybercrime refers to computer facilitated activities accompanied online either illicitly or illegally. Karim (2016) said cybercrime in the banking sector is known as banking fraud that includes illegal money transfer, money removal from one account to another account. Moore, Clayton and Anderson (2009 classified cybercrimes into four main categories: cyber-pornography, cyber-trespass, cyber-violence, and cyber-deceptions. Cybercrime in the banking sector is classified under cyber-deception (Anderson and Barton, 2012)……………………..

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