Milestone in Electronic Commerce: How the Cybercrimes Act 2015 impacts businesses

Expansion of coverage and financial inclusion

Although the Central Bank of Nigeria’s Know-Your-Customer (KYC) policy has been in force and is being implemented by deposit money banks and other financial institutions for several years, the Cybercrimes Act further mandates all financial institutions to verify the identities of their customers before providing them with any “Access Device” (a list of what constitutes an “Access Device” is contained in section 58 of the Cybercrimes Act) for electronic transactions. Similarly, no employee of a financial institution is to be vested with both posting and authorising access at the same time.

It is expected, that these statutory provisions shall limit the incidences of identity theft; fraud via ATM/POS terminals; and fraudulent issuance of electronic instructions. Invariably, as the cyberspace becomes more secure and also easy to link through simple electronic devices such as the mobile phone; the use of electronic money transfer, mobile banking and other electronic financial services will become almost ubiquitous. One hopes to see more people from the informal sector of the economy and those who are largely regarded as previously ‘un-bankable’, opening bank accounts and subscribing to financial services through e-platforms.

Increasing commercial litigation

Last (but not the least) of what to expect, is the rise in volume of commercial litigation arising out of contractual disputes. The lack of a specialised statutory regime governing cyber-related contractual agreements in the past, had limited not only the volume of commercial deals concluded electronically but also the number of cases instituted for seeking redress in cases of breaches.

The Federal High Court is now conferred with special powers to try cyber-related offences and the jurisdiction is nationwide. Disputes shall be given speedy trial without room for interlocutory applications for stay of proceedings. Again, the Cybercrimes Act provides for cross-jurisdictional cooperation. This will ensure that investigation of allegations of offences shall enjoy mutual assistance from foreign countries while accused persons, against whom prima facie cases are established, and convicted persons in respect of trans-border transactions; shall be liable to extradition. In effect, there will be better guarantee of the sanctity of commercial contracts.

CONCLUSIONS

As cyberattacks are a universal threat with implications that cut across the global financial and economic systems, Nigeria, with its Cybercrimes Act, has moved a step further towards joining the league of cyber-protected markets. The country is also now poised to take advantage of information sharing among nations of the world having cyber-related laws. Expectedly, information will be shared about sophisticated technologies deployed by cybercriminals whose activities include hacking, phishing, spamming, spreading of computer virus, cybersquatting and violent attacks; as well as the mechanisms for combating these crimes.

According to the latest System Risk Barometer Survey conducted by The Depository Trust & Clearing Corporation (DTCC) – a US global financial services firm – and reported in the January 2016 issue of The Banker (a publication of the Financial Times of London), “cyber risk remained the number one concern globally among financial service professionals, with 70% of all respondents citing it as a top five risk” in recent years.

With a population that is 170 million strong, and who are fast connecting to one another and to institutions on the internet and social media (about 4 million of this population are said to be very active players already on such electronic/online platforms like Jumia, Konga, Amazon etc. while many more are subscribing to the services of e-payment solution companies like Master Card, InterSwitch, VisaCard and e-transact); the country will become open to e-business much more in the new dispensation.

Though there are concerns that the cost of compliance with the Cybercrimes Act will significantly raise overhead costs for businesses in terms of training, research, and capacity development; the attached benefits of security, reliability, automation, integration, and increased profitability in the long-run make compliance worthwhile. At any rate, doing business in the Nigerian cyberspace is set to experience a paradigm shift, going forward.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo