Wema Bank removes and suspends seven fintech partners for fraudulent activities

Wema Bank, one of Nigeria’s commercial banks, has removed and suspended up to seven fintech partners from its payment gateway platform, citing fraudulent activity.

The bank recently reported a loss of ₦685 million (~$595,000) due to fraud and forgery in 2023 and launched an anti-fraud campaign to protect customers from such activities.

The bank also disclosed that fraudulent inflows into some wallet accounts have recently increased, and these wallets are managed by some of its fintech partners using the bank’s third-party wallet accounts.

Following an investigation and identification of the firms, the bank suspended four fintech firms from its platform and removed three for fraud. Additionally, audits and reviews of fintech partners’ processes to ensure they achieve the expected/desired results continue.

This development demonstrates Wema Bank’s ongoing efforts to establish responsible partnerships, and regulatory procedures, and follow the Central Bank of Nigeria’s Know-Your-Customer (KYC) guidelines.

The anti-fraud campaign seeks to raise awareness, educate, and provide customers with the information they require regarding fraudulent activity on their bank accounts.

As fraud threatens Nigeria’s fintech boom, collaboration and stricter compliance could save the day.

Oluwole Esomojumi, Chief Audit Executive at Wema Bank, stated that the information provided will assist customers in detecting and staying ahead of fraudsters’ constantly evolving tactics.

“We are steps ahead on our end which is why we have taken time to investigate our fintech partners and those found culpable have been disengaged from our payment gateway platform,” Esomojumi said.

The bank has reportedly increased the frequency of security checks and is committed to “rooting them out.”

As Wema Bank tightens its fintech operations, e-payment transactions in Nigeria increased in the first quarter of 2024. The Nigeria Inter-Bank Settlement Systems (NIBSS) reported that electronic transactions increased by 89% to ₦234 trillion in Q1 2024, with consistent monthly growth.