By Jessica Osajie / Posted December 16, 2024
The Financial Institutions Training Centre (FITC) has raised alarms with its recent report highlighting a surge in fraud and forgery cases in Nigerian banks. According to the data, financial institutions reported losses totaling N42.33 billion within the first half of 2024, showcasing a worrying trend in banking fraud across various channels.
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Nigerian banks have reported a whopping N42.33 billion in fraud losses in the first six months of 2024, with increases recorded in multiple channels. Data from the Financial Institutions Training Centre disclosed in its first and second quarter reports on Fraud and Forgeries that the losses revealed an alarming trend.
Most importantly, fraud in bank branches spiked 31%, hitting N42.2 billion in the second quarter of this year, relative to N133.9 million recorded in the previous quarter. CBN data shows money supply above N100 trillion amid cash scarcity in banks
Also, computer/web fraud increased by 1,560.3% from N24 million in the first quarter to N400.8 million the following quarter. Mobile fraud declined by 59% from N216.4 million in the first quarter to N88.7 million in the second quarter. There were no ATM-related fraud cases for the review period.
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The figures for the first and second quarters also show a shift in fraud activities involving some channels or financial instruments. Card fraud declined by 47.66% from 21,469 cases in Q1 to 11,231 in the year’s second quarter, while cheque-related fraud rose 36.67% from 30 cases in the first quarter to 41 cases in Q2. Cash fraud cases increased 9.09% from 209 in the first quarter to 228 in the second quarter of this year. Fraud cases across other payment channels declined relative to the previous quarter.
Mobile fraud declined 99% from N21.6 billion to N216.36 million in the first quarter of 2024. Despite N250bn debt to MTN, Airtel, other Telcos, banks’ USSD transactions hit N2trn Also, PoS fraud declined 68.34% from N14.61 million to N4.63 million, while fraud in bank branches declined by 62.42% from N356.34 million in the second quarter to N133.92 million in the first quarter. Fraud via computer/web channels also declined 16.08% from N28.77 million in the fourth quarter of 2023 to N24.14 million in the first quarter of 2024.
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Hackers are not unrelenting, also. For instance, a few months ago, an Abuja Federal High Court directed a 30-day freeze on 818 bank accounts suspected of being involved in a crime related to a N10 billion cyberattack on a Nigerian bank. The court gave the order on Monday, October 15, 2024, as the court relied on a motion ex-parte filed by the police. The motion was filed against James Akagwu Isaac and others, including several banks.
Experts and stakeholders have called for enhanced Cybersecurity protocols. Banks need to adopt advanced anti-fraud systems and artificial intelligence tools to monitor and mitigate risks across multiple channels.
Apart from public awareness campaigns to educate customers about potential threats, phishing scams, and safe banking practices can reduce susceptibility to fraud, the CBN and relevant agencies must strengthen oversight to address systemic vulnerabilities. Even mandating stricter penalties for fraudsters could deter future cases.
The rising cases of fraud reflect both the expanding digitalization of banking services and the evolving sophistication of cybercriminals. Immediate action is essential to safeguard customer trust and the integrity of Nigeria’s banking system.
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Note: Jessica is on Student Industrial Work Experience Scheme (SIWES) at DDNEWSONLINE.COM from the Department of Mass Communication, National Open University of Nigeria (NOUN).
cybersecurity is important