Deposit money banks in Nigeria will continue to suffer huge loses on account of fraud unless the financial services industry finds a definitive solution to the challenges inherent in Electronic Fund Transfer (EFT) account reconciliation, Yele Okeremi, chief executive officer and managing director, Precise Financial Systems (PFS) has said.
Beyond fraud, weakness and inefficiencies in the account reconciliation process often lead to huge mistakes on the balance sheet and overall inaccuracies in the financial close, industry observers have said.
According to Okeremi, a software expert, account reconciliation across the Automated Teller Machine (ATM), cards (debit and credit) and other electronics platform transactions is becoming a nightmare to back-office systems custodians in the banking and financial services industry. “I followed the process in 2014 and through NIBSS (Nigerian Inter-Bank Settlement Systems) report, I was told that about N6bn was actually lost to fraud.
“But I can say that the losses are in trillions. There are some that are not published because the banks are shy to do so,” he added. According to him, the banks face myriads of challenges in this regard. Speaking at a showcase presentation on ‘‘EFT Accounts Reconciliation: Taming the monster’, Okeremi pointed out that EFT crept into the Nigerian system as a result of technological disruption.
“Some many people went into it and some were even forced without requisite knowledge of what they were actually going into”. He noted that some of the banks delved into EFT without using the appropriate model.
“Though they claimed the transactions are working because money kept moving from one account to another, but lots of them are suffering major losses. It gets worse if it is a loss they are aware of and it is getting really worse because most of these banks don’t know about it”, he also explained.
The PFS CEO said these challenges become glaring when customer complain.
According to him, these challenges can be dealt with “but it is about understanding it and taking appropriate measures, which is one of the thing Clirec, our account reconciliation software, is out to address.”
CLIREC is unique because it is the only accounts reconciliation solution in the Nigerian market that integrates all classes and types of accounts reconciliation; be it Nostro, Suspense, General Ledger, Intercompany, Inter-branch, Money Markets, or E-Channels reconciliation into one reconciliation platform successfully”.
With the ability of CLIREC to interface seamlessly with Core Banking Applications, it has endeared itself to teeming number of firms in the industry. The robust features of CLIREC are products of live reconciliation experiences at many clients’ sites that are running the software”. PFS’ innovative solutions are running thousands of computers, serving numerous clients both in Nigeria and in 27 countries in Africa.
Ben Uzor
