Private banks in Nigeria face a growing threat of fraud despite the deployment of numerous technological tools. According to a survey by the FITC, the Nigerian banking sector has seen a significant increase in incidents of fraud, often resulting in huge losses.
During the first half of 2023, Nigerian banks experienced 24,232 cases of fraud, amounting to a total of N12.33 billion. The survey report reveals that 71 reports on incidents of fraud and counterfeiting were provided by 24 financial institutions in the second quarter of 2023.
A worrying trend is the increasing involvement of staff in fraud, with an increase of 22.22% compared to the previous quarter. Cases of fraud involving third parties decreased by 6.40% in the second quarter of 2023.
The amounts involved in the frauds saw a dramatic increase of 276.98% in the second quarter of 2023 compared to the previous quarter, from 2.58 billion to 9.75 billion naira. Similarly, losses increased by 1,125.03% from 472 million naira in the first quarter of 2023 to 5.79 billion naira in the second quarter of 2023.
This alarming increase in bank fraud in Nigeria raises concerns about the security and effectiveness of the technological tools currently used by private banks. It is imperative for financial institutions to strengthen their security measures and put in place more rigorous monitoring mechanisms to combat fraud.
Protecting sensitive customer data and preventing fraud must be top priorities for Nigerian banks. Raising awareness and training staff on security best practices and collaborating with authorities is essential to effectively combat fraud in the banking sector.
In conclusion, despite the rise of technological tools in private banking in Nigeria, the sector continues to face a significant increase in cases of fraud. It is crucial that financial institutions strengthen their security measures and work closely with authorities to protect customers and prevent financial losses caused by fraud.