NCC: Making regulatory effort towards curbing financial crimes

With the increasing adoption of digital technologies and the emergence of new technologies, the scope of financial crimes has broadened and created further concerns. NCC is making an effort within it’s regulatory framework to curb the menace.

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Robust information and communication technology (ICT) systems are critical for preventing and investigating financial crimes or mitigating the risks associated with virtual assets in financial markets.

These systems facilitate compliance with established standards or regulations, they also provide a platform that allows the monitoring, tracing, and analyzing of digital transactions in real-time.

iCT systems support secure data storage and encryption technologies, which are critical for safeguarding sensitive financial data.The emergence of digital banking has led to the proliferation of financial crimes especially in terms of e-fraud.According to the Executive Vice Chairman/Chief Executive Officer of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, financial crimes refer to criminal activities that involve transactions, abuse, misuse, deception, or manipulation of financial systems for personal gain.He added that they include a wide range of offenses such as Insider abuse, Money Laundering, Terrorism Financing, Proliferation Financing, embezzlement, Fraud (e-fraud, Banking, securities, corporate, Intellectual Property), etc.

“These crimes do not only have a huge economic and social impact but can also be linked to violent crimes that lead to loss of lives. These crimes threaten the integrity, trustworthiness, stability, security, safety, and future of an entity (Country, enterprise, individual),” he stated.Role of ICTMaida said robust information and communication technology (ICT) systems are critical for preventing/investigating financial crimes or mitigating the risks associated with virtual assets in financial markets.

“These systems facilitate compliance with established standards or regulations, they also provide a platform that allows the monitoring, tracing, and analyzing of digital transactions in real time. ICT systems support secure data storage and encryption technologies, which are critical for safeguarding sensitive financial data.“Technological advancements have significantly aided crime prevention and law enforcement agency performance.

Large datasets have been analyzed using advanced data analytics, artificial intelligence, and machine learning algorithms to look for trends that indicate criminal activity. Based on historical data and real-time intelligence, predictive police programs have arisen to foresee and prevent crimes. Digital forensics techniques have also proven useful in criminal investigations.“Historically, a variety of legacy technologies have been used to combat crime; however, in more recent times, novel computer software and hardware are being utilized to monitor individual transactions and communications for suspicious activity.

For instance, anti-money laundering (AML) software uses algorithms to detect anomalous patterns in financial transactions that could suggest money laundering or other illegal activity. Law enforcement agencies are increasingly employing communication monitoring software to follow and analyze digital communications, such as emails, social media interactions, and instant messaging, to discover potential threats or illegal behaviour.

These technologies improve the ability to detect and prevent illegal digital activity.”Maida noted that Nigeria’s telecoms sector has grown significantly, resulting in massive amounts of data being generated daily.According to him, the advent of advanced data analytics and artificial intelligence (AI) provides a gateway to identify suspicious digital patterns indicative of crime.PartnershipThrough partnerships with financial institutions data can be filtered to identify these suspicious patterns and nip them in the bud.

These technologies provide real-time transaction monitoring, allowing for a proactive approach to crime prevention.It has been said that there must be a solid collaboration among the stakeholders and the experts on the deployment of sophisticated technologies to combat financial crimes.

Banks and tech companies are urged to work together to devise new strategies to be ahead of the criminals as the country loses a huge amount of money to such crimes.Specific tech applicationsTo combat financial crimes, innovative solutions such as blockchain, instant payments, artificial intelligence, machine learning, data analytics, regulatory technology solutions, and automated procedures are being deployed.The use of technological tools has made it significantly easier to deal with financial crime while building a long-term strategy for combating it.ToolsComputer Security Incident Response Team (CSIRT) is a group of experts, (of which the Nigerian Communications Commission (NCC) is part) that handles security incidents that can affect the operations of organisations. Digital forensics is a branch of forensic science that focuses on identifying, acquiring, processing, analysing, and reporting data stored electronically.

Electronic evidence is related to criminal activities and can be admitted in the process of prosecuting offenders in law courts.Verification of Biometrics: The incorporation of biometric authentication into financial transactions represents a big step forward in fraud prevention.

The NCC makes certain that telecom carriers follow strict biometric registration rules, which improves the accuracy and security of customer data and in turn financial transactions.Palantir Technologies Solution: Law enforcement agencies and financial institutions have used Palantir’s data analytics platform to examine massive volumes of data for patterns indicative of financial crimes.

It permits the integration of many data sources, allowing for more thorough investigations.Chainalysis Solution Case Study: Chainalysis specializes in blockchain analysis and provides tools for tracking cryptocurrency transactions.

This platform supports law enforcement in tracing illicit blockchain activity such as money laundering, ransomware payments, and illegal transactions.Data securityConcerning the significance of data security and privacy in the use of ICT for crime prevention, Maida said strong encryption and access controls ensure the security of critical information.He stated: “Strict respect for data privacy standards, such as the GDPR (General Data Privacy Regulation) in the European Union and the (NDPA) Nigerian Data Protection Act, aids in the preservation of trust in the use of ICT solutions for crime prevention.

”He listed potential concerns linked with the use of Information and Communication Technology to combat financial crime including cybersecurity threats, noting that as ICT systems get more complex, so do cybercriminal activities. Criminal actors take advantage of the inherent and emerging flaws identified in the ICT systems exploiting these flaws and causing harm.He said relying too much on automated systems for crime detection might result in false positives, in which innocent people or transactions are identified as suspects.

Based on the data on which they are taught, Maida said algorithms may exhibit biases, potentially leading to biased conclusions.Speaking on the human capacity issue, he said compliance officers continuously need to be kept abreast of emerging technologies and innovations and develop the requisite competencies required to use these solutions.On regulatory compliance, the EVC said navigating the complicated world of data protection and privacy rules as well as financial regulation compliance, can be difficult, adding that it is critical to ensure that ICT solutions adhere to legal regulations.

As technology advances, he said ICT solutions must be constantly updated and adapted to tackle evolving financial crimes while being concerned about funding issues.

Due to the evolving nature of technologies, he noted that investing in ICT solutions can become a challenge especially where there is a paucity of funds, stating that adequate funding is required to ensure that the latest solutions are deployed, up to date, and remain relevant.Other issuesMeanwhile, the NCC boss noted that while ICT has transformed the fight against financial crime, there are still difficulties that must be addressed collaboratively.

Some of the aspects according to him are inclusion and the digital divide.He confirmed that access to ICT services is not equal for all parts of the population.

The NCC is actively working to close the digital gap by pushing projects aimed at providing inexpensive and accessible ICT services to underprivileged communities.

This inclusion is critical in ensuring that all citizens have the tools they need to conduct financial transactions safely.

He said collaboration among multiple regulatory authorities is critical for developing a united approach to addressing financial crime.

The NCC actively collaborates with other regulatory authorities to share best practices, thereby guaranteeing a coordinated effort to protect Nigeria’s financial sector.“Continuous Improvement and Adaptation:Criminals adapt quickly to new technologies and strategies. To keep ahead of developing dangers, the NCC understands the importance of ongoing innovation in ICT solutions.

The Commission invests hugely in both Research and Development and in training its manpower on emerging innovations in the tech space.

The NCC is also cultivating beneficial relationships with technology companies in this regard.”Collaboration and International CooperationFinancial Crimes often occur across territorial borders. Criminals take advantage of loopholes in rules and enforcement systems across jurisdictions.

Collaboration between countries is thus critical for tracking down and apprehending these criminals. Some strategies for international collaboration and cooperation according to the NCC boss include sharing intelligence and expertise.

He explained that each country has its own set of insights, intelligence, data, and skills when it comes to tackling various types of financial crime.“By pooling these resources, we can gain a better grasp of emerging criminal techniques and methods.”He also suggested leveraging resources, saying: “Combating financial crimes requires enormous financial, technological, and human resources. Collaboration allows for the sharing of resources, making participating nations reduce the burdens of the huge associated cost while maintaining effective and efficient results.”Furthermore, Maida encouraged international conferences and gatherings where important players gather to debate and share best practices in preventing financial crime are crucial as well.

According to him, the purpose of these fora is to provide a platform for worldwide law enforcement agencies, cybersecurity specialists, and financial institutions to discuss insights and tactics for countering cyber-enabled financial crimes.

Last lineICT, if well utilised, plays a critical role in combating financial crimes by enabling real-time surveillance, regulatory compliance, and secure data processing. It provides advanced analytics, AI, and machine learning to law enforcement organisations for better crime detection. Furthermore, hard technologies such as CCTV cameras and security systems supplement physical security measures.

Continued investment in ICT solutions, as well as a multidisciplinary and multi-stakeholder strategy, combining technology specialists, legal professionals, and legislators, are critical in keeping up with emerging criminal methods. Public education and understanding of internet safety are also important in limiting the risks linked with the spread of criminality via technology.