Deposit money banks in Nigeria have seen a significant spike in fraud cases and financial losses during the second quarter of 2023, according to a recent report released by the Financial Institutions Training Centre on Fraud and Forgeries in Nigerian banks.
The report indicates a startling rise in the amount of money lost due to fraud, with the total losses reaching N5.79 billion during the period. This represents a staggering 1,125% increase compared to the N472 million lost in the preceding quarter (Q1’23).
The data reveals that the total amount involved in these fraud cases surged to N9.75 billion, marking a remarkable 276.98% rise from N2.58 billion in the previous quarter. The report also highlights a substantial increase in insider involvement, with staff participation in fraud cases rising by 22.2% during the period.
The major contributors to the losses were fraudulent loans, accounting for 94.35% of the total losses at N5.46 billion, followed by mobile fraud at 3.39%, equivalent to N196 million. Notably, computer/web (internet) fraud only accounted for one percent of the total losses.
The report underscores that while reported cases of fraud decreased by 6.96% from the previous quarter, the substantial increase in both the total amount involved and the losses indicates a grave concern. The rise in staff involvement in fraud is attributed to non-pensionable employment practices and a lack of rigorous staff orientation and training.
Experts in the financial sector expressed their concerns, stating that the rising fraud cases could erode confidence in banks and weaken their financial positions. They called for improved supervision and measures to safeguard the assets of financial institutions. Additionally, they stressed the need for regulators to investigate the sources of fraud and apply appropriate sanctions to address the systemic failure that facilitated these incidents.
