The Financial Institutions Training Centre, FITC, has revealed that 105 Nigerian bankers defrauded depositors a whopping N59 billion in the first quarter of 2024.
The Centre, however, stated that the amount represented a decline from the 2023 period.
FITC, however, stated that the banking sector has experienced a significant rise in fraudulent activities. This is despite a decline in the number of bank staff implicated in such cases.
According to the report, the first half of 2024, found that 105 bankers were involved in fraud. Marking a 34.38% decrease from the 160 staff-related fraud cases recorded in the same period in 2023.
It stated that the total value of fraud linked to bankers surged by a staggering 380%. Thus, rising from N12.33 billion in the first half of 2023 to N59.2 billion in 2024.
“The financial losses from these fraudulent activities also skyrocketed. With banks losing N43.07 billion in the first half of 2024. A 588% increase compared to the N6.26 billion lost in the same period last year.
The report suggests that 72.75% of the total amount involved in fraud cases this year resulted in financial loss.
“The rise in fraud among bankers has occurred despite a growing trend of job terminations within the industry,” it said.
FITC added that in the first half of 2024, 84 employees were dismissed due to fraud. The figure representing a 223% increase from the 26 dismissals in the same period of 2023.
It noted also that the high rate of dismissals likely contributed to the decrease in staff involvement in fraud.
“While fraud among bank staff has declined, outsider involvement remains prevalent. Accounting for 92.74% of the total fraud cases.
“A total of 21,335 fraud cases involving outsiders were reported in the first half of this year. This represents a slight drop from the 23,912 cases reported in the same period of 2023.
The FITC report highlighted the main channels through which fraud occurred. These include bank branches, web-based platforms, and ATMs.
According to the report, fraud through bank branches accounted for the largest financial losses. With N55.01 billion lost in the first half of 2024. This figure of 646% represents increase from N7.37 billion recorded last year.
“Web-based fraud followed, with N1.87 billion lost, while ATM-related fraud accounted for N43.1 million.
The report also underscored the sharp rise in personnel expenses across the banking sector. Despite the increase in fraudulent activities, the wage bills of many banks have surged. Thus, reflecting growing operational costs amid high inflation.
It listed Access Holdings as the highest with wage bill of N151.5 billion in the first half of 2024. This is an increase of 145% from N61.9 billion in the previous year.
“First Bank followed closely with N134.2 billion. While UBA and Zenith Bank also saw significant increases in their wage expenses.
FITC, however, emphasized the need for enhanced staff training and stronger fraud detection systems as response to the rising fraud threat.
The report, therefore, recommended that banks invest in advanced technologies. These include Artificial Intelligence and Machine Learning, which will help to detect and prevent fraudulent transactions in real-time.
“The improvement of staff training and awareness is paramount. Banks must intensify fraud prevention training for all employees. Focusing on the latest fraud tactics and warning signs, especially in areas like card-related and web-based fraud,” FITC stated.
Additionally, the report called for tighter access controls within bank branches. It also urged financial institutions to conduct regular audits and continuous monitoring of operations. Particularly in high-risk areas such as settlement processes.
It also recommended multi-factor authentication and restricted access to sensitive data as measures to mitigate insider threats.
source: PUNCH Metro
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