With fraud cases within the banking system rising by 9,004 per cent, which led to a loss of about N42.6 billion in the second quarter of 2024, 49 appointments have been terminated within the industry.

According to the Financial Institutions Training Centre (FITC) Q2 2024 Fraud and Forgeries report released at the weekend, losses from fraud rose from N468.4 million (Q1) to N42.6 billion, a staggering percentage increase of 9004.82 per cent.

FITC explained that while 11,472 cases were recorded in Q1 2024, the figure rose to 11.532 three months after (0.52 per cent). The total amount involved in the fraud rose to N56.3 billion from N2.988 billion (1,784.6 per cent). It put the total amount lost from April to June at N42.6 billion from N468.4 million, which showed a percentage change of 9,004.82 per cent within the period under review.

In the frauds, FITC revealed that outsider involvement rose from 10,397 in Q1 to 10,938 in Q2 (5.20 per cent), while insider (staff) involvement also went up from 47 to 58 (23.4 per cent). This led to the termination of people found culpable, where 49 persons as against 35 in Q1 lost their appointments.

Further analysis of the report showed that “miscellaneous and other fraud” types constituted the largest loss, representing 96.46 per cent 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.

FITC explained that Q2 2024, fraudulent activities were carried out through various channels, including Automated Teller machines (ATMs), online platforms like web and mobile banking, bank branches and Point of Sale (POS) terminals.

Among instruments used, card fraud recorded a significant decrease, declining by 47.66 per cent from 21,469 in Q1 to 11,237 in Q2.

In contrast, fraudulent activity involving cheques and cash increased by 36.67 per cent and 9.09 per cent, respectively, with cheques surging from 30 cases in Q1 to 41 cases in Q2, while the use of cash rose from 209 in Q1 2024 to 228 in Q2.

A further analysis of the data showed a significant rise in the amount lost across all channels, except for mobile fraud, which recorded a decline.

Losses through bank branch-related channels rose by 31,497 per cent, to a value of N42.2 billion in Q2 from N133.9 million in Q1 2024. Computer/web frauds also saw a monumental increase of 1,560 per cent, with losses growing from N24 million to N400.8 million.

However, there was no indication of the amount lost to ATM-related fraud. As initially mentioned, mobile fraud recorded a decline in the amount lost from the previous quarter, decreasing by 59 per cent from N216.4 million in Q1 to N88.7 million in Q2 2024.

With the sudden surge in losses to fraud, the FITC advised the banks to enhance their monitoring and auditing procedures. It said deposit money institutions could utilise Artificial Intelligence (AI) tools that flag unusual entries or patterns to implement continuous and automated monitoring systems that could detect anomalies or discrepancies in settlement files.

It added that regular unannounced internal audits focusing specifically on settlement processes could be conducted to identify and address any irregularities promptly.

“Access controls should also be strengthened by limiting access to settlement files to only a small, vetted group of authorised personnel given the appropriate clearance and 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 unauthorised changes to settlement files,” FITC stated.

The firm disclosed that In the period under review, it received 80 returns on fraud and forgery cases from 28 Deposit Money Banks (DMBs).

According to FITC, a closer look revealed that 26 reports were submitted in April, while 27 reports were received in May and June. (The Guardian)