Reports by an African-focused research organization, SBM intelligence has revealed an increase in fraud cases within the Nigeria’s banking sector over the past five years. SBM stated that financial losses due to fraudulent activities in Nigerian banks surged by N14.71 billion from 2019 to 2023.
This revelation was contained in SBM June report, published on Thursday, June 13.
In its report, the research firm provided a detailed account of the yearly escalation in fraud-related losses.
It said, “Fraud is common in the financial sector globally. In Nigeria, it is endemic. Although the number of incidents has reduced from a high in 2021, the amount of money lost to fraud has increased significantly.
“This may indicate that the perpetrators have become better at their act and figured out ways to move larger sums of money undetected,” SBM said.
Details from the report showed that the sector recorded 44,947 fraud incidents. Which resulted in a loss of N2.96 billion in 2019.
According to SBM, this figure more than doubled in 2020, with 101,624 cases leading to losses of N11.61 billion. It maintained that the upward trend continued into 2021, with 123,918 fraud cases causing a loss of N12.77 billion.
However, despite a reduction in the number of fraud cases to 101,669 in 2022, financial losses increased to N14.32 billion.
“By 2023, the number of incidents further declined to 95,620. Yet the total losses soared to an unprecedented N17.67 billion.
The report, also highlighted various methods through which fraud is perpetrated. These it stated include: social engineering, website/server hacking, robbery, PIN compromise and internal collusion. Others are phone theft, and SMiShing (SMS phishing).
SBM stated that losses due to social engineering in the bank fraud rose from N8 billion in 2022 to N9.4 billion in 2023. Similarly, website/server hacking saw losses jump from N6.2 million to N2.4 billion over the same period.
It also said that robbery-related fraud losses escalated from N437.4 million in 2022 to N1.6 billion in 2023. While PIN compromise resulted in losses of N852.3 million in 2022 and N1.3 billion in 2023.
“Internal collusion accounted for losses of N1.5 billion in 2022 and N1.04 billion in 2023. While losses from phone theft rose from N259.2 million in 2022 to N317.7 million in 2023. And SMiShing losses surged from N1.01 million to N30.7 million over the same period.
SBM also added other means of carrying out fraud in the banks to include fake assistance and missing/lost cards, phishing. Lack of two-factor authentication (2FA), card theft, were also mentioned to have contributed significantly to the total losses in 2023.
Premium Times
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