Nigerian Deposit Money Banks have recorded a sharp Surge in Fraud Incidents and Monetary losses during the second quarter of 2023 (Q2’23).
The latest Report underscores a Significant rise in Cases involving Insiders.
The total Monetary Value linked to Fraud during this period reached N9.75 billion, Marking a great Increase of 276.98 percent Compared to the previous quarter (Q1’23), which stood at N2.58 billion.
The Losses Incurred in these Incidents amounted to N5.79 Billion, presenting an astounding Surge of 1,125 percent in Comparison to the N472 million reported in the Initial quarter (Q1’23).
These disclosures were Disclosed in the recently released Report by the Financial Institutions Training Centre (FITC), focusing on Fraud and Forgeries in Nigerian banks for Q2’23.
FITC’s report highlights that these Losses were Observed across 24 Banks that submitted their Fraud Case records for the specified period.
Additionally, it noted a 6.4 percent decrease in Outsider Involvement, while Staff Involvement surged by 22.2 percent during this time frame.
FITC, owned by the Banker’s Committee—a Consortium Including the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), licensed Banks, and discount houses—aims to provide Innovative knowledge solutions and Capacity-building programs to enhance the Nigerian Financial Services Sector.
The FITC report delineates that the Primary contributor to Losses was Fraudulent Loans, accounting for a Significant 94.35 percent with a Value of N5.46 billion. Following this, Mobile Fraud Constituted 3.39 percent of the total loss, equivalent to N196 million.
Minimal Instances of Computer/web (Internet) Fraud were reported, making up just 1 percent of total Losses, amounting to N59.5 million during this Period.
The report elucidated: “During the second quarter of 2023, there were 11,679 reported Cases, showing a 6.96 percent decrease compared to the 12,553 Cases in the first quarter.
However, the Data Indicates a Significant Increase in the total amount Involved in Fraud Cases.
The amount rose from N2.59 billion in the previous quarter to N9.75 billion in Q2, representing a 276.98 percent Increase.”
The Report further added: “Additionally, the amount lost also saw a Substantial rise, Increasing from N472 million in Q1 2023 to N5.79 billion in Q2 2023, which corresponds to a 1125.03 percent Increase.
This increase might be attributed to the fact that Banks were liable for the Losses Incurred and had to make Refunds to Customers.”
The report also emphasized a decrease in Outsider Involvement by 6.40 percent, dropping from 12,351 Cases in the previous quarter to 11,561 Cases.
However, Staff Involvement in Fraud rose by 22.22 percent, escalating from 72 Cases in Q1 2023 to 88 Cases in Q2 2023.
Conversely, Cases of terminated Appointments connected to Fraudulent activities fell by 26.67 percent, declining from 15 Cases in Q1 2023 to 11 Cases in Q2 2023.
Responding to the Report, the Association of Senior Staff of Banks, Insurance Institutions, and Financial Institutions (ASSBIFI) expressed concern over the rising cases of Staff Involvement in Fraud.
They attributed this Trend to the Casualization of Workers and Non-Pensionable Employment Practices in the Financial Sector.
The President of ASSBIFI, Olusoji Oluwole, emphasized the Importance of adopting regulations to address these issues and Promote Staff Welfare to curb such fraudulent activities.
