CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
It is obvious that the ICT meets a variety of educational, entertainment, communications, commerce needs, and other areas just few to mention, for its users. ‘With these benefits, though, this same technology has also ushered in a new wave of criminal activity called cybercrime’ (Saban, McGivern & Saykiewicz, 2002) defined as ‘any illegal act fostered or facilitated by a computer, whether the computer is an object of a crime, an instrument used to commit a crime, or a repository of evidence related to a crime’ (Royal Canadian Mounted Police, 2000, in Hinduja and Schafer 2009) Cybercrimes are those crimes which are committed in the online or electronic environment.
As the Internet came into widespread commercial use, the nature of computer crimes began to shift. ‘While in some crimes, one component of the crime may have been committed using an electronic instrument, in other crimes, the crime as a whole is committed in the online or electronic environment. These crimes, known as cybercrimes, generally occur in the virtual community of the Internet or in cyberspace’ (Heather 2008; Newton 2008).
Cybercrime began with disgruntled employees causing physical damage to the computers they worked with, with the aim to get back at their superiors. As the ability to have personal computers at home became more accessible and popular, cyber criminals began to focus their efforts on home users (Ogunlere, 2013). Further research on this reveals that history of cybercrime was further established that the first published report of cybercrime occurred in the 1960s, when computers were large mainframe systems. Since mainframes were not connected with other ones and only few people can access them, the cybercrimes were always “insider” cybercrimes, which means employment, allowed them to access into mainframe computers, and then refers to as computer crime rather than cybercrime. Actually, in the 1960s and 1970s, the cybercrime, which was “computer crime” in fact, was different from the cybercrime we faced with today, because availability of Internet was restricted within some sections (e.g. US military) in that era. In the following decades, the increasing of computer network and personal computers transformed “computer crime” into real cybercrime.
In fact, the former descriptions were “computer crime”, “computer-related crime” or “crime by computer”. With the pervasion of digital technology, some new terms like “high-technology” or “information-age” crime were added to the definition (Brenner, 2009). Since Internet was invented, other new terms, like “cybercrime” and “net” crime became the order of the day as people began to exchange information based on networks of computers, also keep data in computer rather than paper. At the same time, the cybercrime was not only restricted in target cybercrime, but expanded into tool cybercrime and computer incidental. We therefore come to terms with a conclusion on the meaning that cybercrime is an evil having its origin in the growing dependence on computers in modern life. A simple yet sturdy definition of cybercrime would be unlawful acts wherein the computer is either a tool or a target or both”. Defining cybercrimes as illegal behavior directed by means of electronic operations that targets the security of computer systems and the data processed by them (Azzez & Osunmade, 2009). Cybercrime in a broader sense computer-related crime: any illegal behavior committed by means of, or in relation to, a computer system or network, including such crimes as illegal possession and offering or distributing information by means of a computer system or network.
Cybercrime can categorized into three different stratum which include the crimes against persons, crimes against Business and Non-Business organizations and crimes against the government. Based on impunity of cybercrime in developed and developing world this study intends to fill the gap by investigating into the effect of cybercrime on Nigerian Economy (A financial sector and country-centric perspectives).
1.2 Statement of the Problem
Cybercrime is the latest and perhaps the most complicated problem in the cyber world. “Cybercrime may be said to be those species, of which, genus is the conventional crime, and where either the computer is an object or subject of the conduct constituting crime” “Any criminal activity that uses a computer either as an instrumentality, target or a means for perpetuating further crimes comes within the ambit of cybercrime”
Cybercrime is the latest and perhaps the most complicated problem in the cyber world. “Cybercrime may be said to be those species, of which, genus is the conventional crime, and where either the computer is an object or subject of the conduct constituting crime” “Any criminal activity that uses a computer either as an instrumentality, target or a means for perpetuating further crimes comes within the ambit of cybercrime”. The problems and modes of cybercrime includes:
1. Harassment via email
2. Cyber- stalking
3. Dissemination of obscene material/ Indecent exposure/ Pornography (basically child pornography) ,Polluting through indecent exposure
4. Defamation
5. Unauthorized control/access over computer system.
6. E-mail Spoofing
7. Computer Vandalism
However, in an attempt to uncover these crimes billions of Naira is lost through these crimes annually with little or no hope of curbing it due to its complex nature. Most perpetrators of this crime are never caught and if at all caught, are never prosecuted because of lack of concrete evidence, organizational and societal awareness. As a result the extent and impact of Cybercrime is uncertain because lack of reporting leads to uncertainty with regard to the extent and impact of the crime. This is especially relevant with regard to the involvement of these crimes as compared to other organized crimes. Available information from the crime statistics in Nigeria is lacking and if any, do not reflect the real extent or impact of this crime in our every-day living. From the aforementioned above problems of cybercrime on the economy this study will investigate into the effect of cybercrime on the Nigerian economy. Uniquely this study examine the effect of cybercrime on the financial sector, negative effect on international trade and country’s image on the global world.
1.3 Objective of the Study
The broad objective of this study is to investigate the effect of cybercrime on Nigerian economy (a financial sector and country-centric perspective).The specific objective of the study include:
1. To examine the effect of cybercrime on financial sector services.
2. To investigate the negative effect of cybercrime on international trade services
3. To mirror out the effect of cybercrime on country’s economic and social image.
1.4 Research Question
The following research questions include the following:
1. What effect does cybercrime has on financial sector services
2. What are the negative effect of cybercrime on international trade services
3. What are the effect of cybercrime on country’s economic and social image
1.5 Research Hypotheses
Hypothesis One
H0=Cybercrime has no significant effect on financial services
H1=Cybercrime has significant effect on financial services
Hypothesis Two
H0=Cybercrime has no significant effect on international trade service
H1=Cybercrime has significant effect on international trade services
Hypothesis Three
H0=Cybercrime has no significant effect on country’s economic and social image
H1=Cybercrime has significant effect on country’s economic and social image
1.6 Significance of the Study
This study will be significant for the following stakeholders which include: Financial Institutions, Exporters and Financial Sector Regulators.
The financial institution will from this study have the understanding of the different of form of cybercrime that may be perpetrated against them. They will also be well informed of the negative effect of financial crime on the services they are expected to render to their customer and client .It will also aid them to know the strategies they have to put in-place to curb the negative effect on their profitability and growth
Exporters will from the findings of the study will get informed and adjust to precautions that will not allow them to lose they proceed of sales to cybercrime gurus. The exporter will from the findings of the study get well informed of the various type of cybercrime and adjust to the technological trend, so has not to suffer the pain.
The financial sector regulators will from the findings of the study be informed of the evil of cybercrime on the entire financial system and also proffer solution to the negative impact of cybercrime on the entire financial system, most especially bank and non-banks.
1.7 Scope of the Study
The study will utilize the descriptive survey design. The questionnaire will be distributed to the respondent in five selected commercial banks in Nigeria. The study will be carried in Lagos State. The study will focus on two department in the banking sector the international and Foreign exchange sector (Money gram) and the Internet banking sector. The study will use Taro Yamane to determine the appropriate sample size that will be aid the distribution of the questionnaire. The simple percentage and the simple linear regression will be used.
1.8 Definition of Terms
Cybercrime: This is a crime that is perpetrated on the internet via the use of the computer and information technology
Financial Services: This is are the services that is rendered by any financial oriented organization.
Economy: This is monetary and non-monetary set-up a state or geographical settings.