For protection and privacy reasons, we will not be disclosing the client's name. However, please note that this is a real case scenario
SMX Bank is a Lagos-based, technology-driven microfinance bank focused on financial inclusion. They provide accessible savings, loans, and investment solutions to individuals and small businesses, empowering communities through innovative and reliable financial services.
In December 2024, SMX Bank faced a critical internal fraud incident originating from its mobile banking platform. The organization experienced:
Multiple fraudulent accounts created on the mobile app.
Unauthorized transfer of funds from legitimate customer accounts into fake accounts.
Lack of visibility into how these accounts were created and how the fraud was executed.
The alerts prompted SMX Bank to contact Ethnos Cyber. Upon meeting the team, we immediately commenced a detailed forensic and security investigation to identify the root cause, the actors involved, and the systems exploited.
Our preliminary assessment uncovered key issues:
No defined IT governance framework to guide developmentand system changes.
Developers were able to modify application code without approvals or a change management process.
Lack of security controls that should have prevented unauthorized account creation.
SMS alerts for impacted customers had been disabled, preventing victims from receiving real-time transaction notifications.
Ethnos Cyber performed a structured forensic investigation combined with deep technical analysis across SMX Bank's systems:
Captured and analyzed database logs, application logs, SMS gateway logs, and backend service logs.
Queried transaction trails to identify how funds were moved across accounts.
Reviewed the mobile application codebase and backend scripts to determine possible points of manipulation.
Investigated authentication, BVN validation flows, and account creation logic.
Assessed the integrity of IT governance processes, access controls, and developer privileges.
Services Rendered
Detailed Forensic Investigation across applications, databases, and SMS systems.
Policy & Governance Review to assess gap enabling internal manipulation.
Enterprise Vulnerability Assessment of the application and underlying architecture.
Comprehensive Forensic & VAPT Reports with root-cause analysis and remediation steps.
Result At a Glance
The investigation revealed the full fraud pathway and helped Spectrum Microfinance Bank take decisive corrective action:
Identified that a developer had modified the application code to disable BVN validation, enabling the creation of multiple fake accounts.
Discovered that SMS notification services were disabled, preventing customers from receiving debit alerts.
Traced fraudulent transactions across multiple accounts and phone numbers.
Provided intelligence that enabled law enforcement to identify malicious actors and make arrests.
Exposed additional application and infrastructure vulnerabilities through the VAPT exercise.
Supported the bank in closing governance, architectural, and application security gaps.
Recommendations/Next Steps
Establish and enforce a strict IT governance and change management framework.
Reinstate and safeguard customer SMS/transaction alert systems.
Conduct periodic enterprise-wide VAPT to proactively identify weaknesses.
Implement role-based access control to restrict developer privileges.
Enforce secure development practices and continuous code reviews.
Train internal teams on fraud prevention, secure coding, and incident response.
CLIENT TESTIMONIAL
“The forensic investigation carried out by Ethnos Cyber exposed critical lapses we were unaware of. Their thorough analysis helped us trace the fraud, identify the perpetrators, and strengthen our systems. With their support, SMX Bank now operates with greater confidence and improved security maturity.”