| The information communication technology (ICT) revolution has had impacts in almost every area of human endeavor. From business, industry, government to not-for-profit organizations, ICT has simplified business processes such as sorting, summarizing, coding, editing, customized and generic report generation in a real-time processing mode. However, ICT has also brought unintended consequences such as criminal activities, spamming, credit card frauds, ATM frauds, phishing, identity theft, and other related cyber crimes. This study sought to assess cyber crime and its impact on the banking institutions in Nigeria. It also examined the existing policy framework and assessed the success of the institutional countermeasures in combating cyber crime in the banking industry. Based on the conceptual model of three main constructs of organizational internal security, state regulatory policy, and electronic banking services, a structured questionnaire was designed to capture each of the factors in the model. The questionnaire was administered to bank officials, and their responses were analyzed using Structural Equation Modeling (SEM) as the statistical tool. Data analysis results showed a significant relationship between the existence of fraud unit as a measure of internal banking security to electronic banking services. Other factors of internal banking security such as access control, IT support, and IT training were found not to have a relationship to electronic banking services and cyber crime. Also, national IT policy and internal banking policy as a measure of effectiveness of state regulatory policies showed no significant relationship to cyber crime. On the whole, electronic banking services showed a statistically significant relationship to cyber crime. In light of these findings, the study suggests: (a) that the Central Bank of Nigeria mandate banking institutions to route all proceeds of wire transfers through the beneficiary's account in the bank, (b) that there is a need for acquisition of cyber forensic knowledge for the law enforcement agencies to combat cyber crime, (c) that there is a need for the establishment of a centralized Computer Crime Response and Resource unit, and (d) that there is a need for banks in Nigeria to establish the right security protections and build the right security infrastructure for known and unknown threats. |
