Commercial banks and deposit-taking financial institutions in Nigeria have sacked 49 employees due to their involvement in fraudulent activities between April and June this year, leading to the loss of a whopping N42.6 billion.
The Financial Institutions Training Centre (FITC) revealed this in its Q2 2024 fraud and forgeries report, which was recently released.
This indicates a 40% increase in the number of employees whose appointments were terminated when compared with the 35 cases of termination recorded in Q1 2024.
According to the report, 58 bank workers were involved in the 11,532 cases of fraud reported in the period under review.
This shows a 23% increase compared with 47 insider involvement reported in Q1 2024. The FITC report further revealed that outsider involvement in fraud cases increased by 5.20% from 10,397 in Q1 to 10,938 in Q2 2024.
Loss to fraud
Meanwhile, the banks’ losses to financial fraud in the second quarter of this year jumped by over 900% to N42.6 billion compared with N468.4 million recorded in Q1. This also represents a 637% increase when compared with the N5.7 billion loss recorded in Q2 2023.
- Without adding the Q1 record, the amount lost in Q2 2024 alone surpassed the total amount lost to fraud by the banks in the full year 2023.
- Analysis of FITC’s data for last year showed that the banks lost a total of N9.4 billion throughout the year.
- In terms of the fraud types, FITC said ‘miscellaneous and other fraud’ types constituted the largest loss, representing 96.46% of the total amount lost, with a value of N41.14 billion.
- This was followed by losses from fraudulent withdrawals and computer/web fraud, amounting to approximately N781.2 million and N400.7 million, respectively.
Recommendations for banks
The FITC in its recommendations to the banks urged them to leverage technology to minimise cases of fraud on their systems.
Specifically on the rising involvement of insiders, the Centre advised the banks to strengthen their access controls by limiting access to settlement files to only a small, vetted group of authorized personnel given the appropriate clearance and are regularly trained on the latest security protocols.
“The implementation of multi-factor authentication (MFA) and role-based access controls (RBAC) can aid the reduction of the risk of unauthorized changes to settlement files,” FITC stated.
It also emphasized the need for the banks to intensify fraud prevention training for all their employees, with a focus on the latest fraud tactics and key warning signs, especially in rapidly growing areas like card-related and web-based fraud.
What you should know
- The FITC report is based on returns on fraud and forgery cases received from twenty-eight (28) deposit money institutions in the country.
- According to FITC, 80 of such returns were received in the quarter under review.
- Further analysis shows that twenty-six (26) reports were submitted in April, while twenty-seven (27) reports were received in both May and June.
