Wema Bank Penalized for Breaching Multiple Nigerian Laws, Pays N61.350 Million in Fines in 2023

…Financial Statement Reveals Violations of Cybersecurity, BOFIA, and CBN Regulations, While Complaint Resolution Time Improves

Wema Bank, a prominent financial institution in Nigeria, faced repercussions for breaching seven Nigerian laws in the fiscal year 2023, as disclosed in its full-year financial report. The penalties imposed amounted to a substantial sum of N61.350 million.

Among the infractions highlighted in the report were violations of cybersecurity regulations, a section of the Bank and Other Financial Institutions Act (BOFIA) 2020, and circulars issued by the Central Bank of Nigeria (CBN) regarding Know Your Customer (KYC) protocols.

For contravening the cybersecurity framework, Wema Bank incurred a fine of N2 million, while a more significant penalty of N20 million was imposed for breaching Section 19(3A) of BOFIA, 2020. Additionally, the bank was fined N17.45 million for non-compliance with CBN’s KYC directives.

Late submission of final returns resulted in a penalty of N10 million, reflecting the importance of timely regulatory compliance in the banking sector, especially concerning anti-money laundering measures.

The CBN’s emphasis on KYC protocols aims to combat financial crimes and enhance the integrity of the financial system. By adhering to these guidelines, financial institutions can mitigate risks associated with money laundering and fraudulent activities.

Furthermore, Wema Bank faced penalties totaling N8 million for breaches in Risk-Based Supervision (RBS) and N2 million for a regulatory breach related to CBN clearance requirements.

In addition to regulatory fines, the bank incurred losses amounting to N256.387 million due to fraud and burglary incidents in 2023. While significant, this figure marked a notable decrease from the previous year, indicating proactive measures taken by the bank to address security challenges.

Osai Djemba, a credit risk analyst, underscored the importance of implementing advanced security measures, such as artificial intelligence, to mitigate theft risks effectively. Djemba emphasized the growing sophistication of criminals targeting the Nigerian financial sector.

Despite facing regulatory challenges and security threats, Wema Bank made strides in resolving customer complaints. The bank reported a decrease in unresolved complaints, from 13,642 in 2022 to 9,974 in 2023. Moreover, the average time taken to resolve complaints reduced by 60%, with a resolution rate increasing from 93% to 98% compared to the previous year.

The financial statement highlighted the bank’s commitment to enhancing customer experience and operational efficiency, exemplifying its dedication to regulatory compliance and customer satisfaction.