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WEMA Bank’s Legal Issues: Dealing with Cybersecurity Penalties and Regulations
WEMA Bank’s Legal Issues: Dealing with Cybersecurity Penalties and Regulations
WEMA Bank, led by Moruf Oseni, has recently become embroiled in a legal quagmire that has raised concerns in Nigeria’s financial sector. A comprehensive investigative report has unearthed a series of legal breaches that have culminated in penalties amounting to a staggering N61.350 million. These penalties arise from the bank’s violations of seven Nigerian laws over the course of a single fiscal year, painting a concerning picture of compliance and cybersecurity oversight within the institution.
The revelations, extracted from WEMA Bank’s financial statement for the fiscal year 2023, have brought to light a myriad of transgressions. Among the laws contravened are cybersecurity regulations, sections of the Bank and Other Financial Institutions Act (BOFIA) 2020, and directives issued by the Central Bank of Nigeria (CBN) regarding Know Your Customer (KYC) protocols.
Specifically, the penalties levied against WEMA Bank include a N2 million fine for non-compliance with cybersecurity frameworks, a hefty N20 million penalty for breaching Section 19(3A) of BOFIA 2020, and fines totaling N17.45 million for violations of CBN circulars pertaining to KYC requirements. Additionally, the bank faced financial repercussions such as a N10 million fine for the late submission of final returns and an N8 million penalty for breaches in Risk-Based Supervision (RBS).
Despite the regulatory challenges and financial penalties, WEMA Bank did report a silver lining in the form of reduced losses attributed to fraud and burglary incidents. In 2023, the bank recorded losses amounting to N256.387 million, a significant decrease from the previous year’s figure of N880.154 million. This reduction underscores the bank’s efforts to combat fraudulent activities and enhance security measures, as highlighted by credit risk analyst Mr. Osai Djemba, who advocated for the adoption of advanced technologies like artificial intelligence to mitigate theft risks effectively.
Moreover, the bank saw a decline in unresolved complaints lodged against it, with the number dropping to 9,974 by December 2023 from 13,642 in the corresponding period of 2022. Noteworthy is the fact that customers with unresolved complaints demanded compensation totaling N10.843 billion, prompting WEMA Bank to refund a substantial sum of N11.258 billion in addition to the original claims.
In response to these challenges, WEMA Bank has reaffirmed its commitment to enhancing customer experience and addressing regulatory concerns. The bank’s initiatives include a 60% reduction in the average resolution time for complaints compared to 2022, alongside an increased resolution rate from 93% to 98%. These efforts underscore WEMA Bank’s dedication to improving service delivery and ensuring compliance with regulatory standards, despite the hurdles it currently faces.
As WEMA Bank navigates these legal complexities and strives to bolster its cybersecurity framework, the financial institution stands at a critical juncture that necessitates a robust commitment to regulatory compliance, customer satisfaction, and the adoption of cutting-edge security measures to safeguard its operations and reputation in the ever-evolving landscape of the Nigerian banking industry.
