Twenty-four Banks across Nigeria have reported a surge in fraud incidents during the second quarter of 2023 (Q2’23), leading to a steep rise in financial losses.
According to the latest report released by the Financial Institutions Training Centre (FITC), insider involvement in these cases has also witnessed a sharp increase.
It stated, ‘for the second quarter of 2023, a total of eleven thousand six hundred and seventynine (11,679) cases were reported and when compared to the twelve thousand five hundred fifty-three (12,553) cases recorded in the Q1 a 6.96 per cent decrease is noted.’
However, the total amount involved in the fraud cases in April, May, and June rose to N9.75 billion, up by a whopping 276.98 per cent from N2.58 billion in the preceding quarter, Q1’23.
This was revealed in the new report released yesterday by the Financial Institutions Training Centre, FITC, on Fraud and Forgeries in Nigerian banks for Q2’23.
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Intriguingly, the report points out that out of the 24 banks that submitted data on fraud cases for this period, outsider involvement witnessed a decline of 6.4 per cent. In contrast, staff involvement surged by 22.2 per cent within the same timeframe.
FITC is owned by the Banker’s Committee, which comprises the Central Bank of Nigeria, CBN, Nigeria Deposit Insurance Corporation, NDIC, all licensed banks, and discount houses in Nigeria.
It was established to provide innovative knowledge solutions and capacity building programmes that develop and strengthen resources for the Nigerian financial services sector.
Type of fraud
According to the FITC report, fraudulent loans, mobile fraud, computer/web fraud, and fraudulent withdrawals were the three most prevalent types of fraud in Q2, 2023.
Fraudulent loans accounted for the highest loss at 94.35 percent with a value of N5.46 billion. “It was followed by the Computer/Web fraud category at N1.47 billion (15.10 percent). Mobile Fraud came next at N751 million (7.7 percent), and fraudulent withdrawals amounted to N663 million (6.79 percent).”
Channels, Instruments and Personalities Involved in Perpetrating Fraud
The report further revealed that during Q2 2023, fraudulent activities were conducted through various channels, which included ATMs, online platforms such as web and mobile banking, bank branches, and point-of-sale (POS) terminals.
“Specifically, there was a substantial 108.87 per cent rise in fraud cases through ATMs, from 248 cases in the previous quarter to 518 cases in Q2 2023.
“Similarly, the number of fraud cases through bank branches significantly increased by 375.69 per cent, rising from 162 cases in Q1 to 769 cases in Q2 2023.
“The POS channel recorded 1994 cases, indicating a slight 0.45 per cent increase from the previous quarter’s 1985 cases.
“However, web and mobile channels experienced a decrease of 9.45 per cent and 25.47 per cent respectively, with fraud cases dropping from 5173 to 4684 in the web channel and from 4982 to 3713 in the mobile channel,” the report stated.
