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Banking Fraud Declines by 85% as Customer Lost ₦472m

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CEM REPORT, FINANCE | Bank customers in Nigeria lost ₦472m to activities of fraudsters in the first quarter of 2023 (Q1’23).

A decline of 85.13 per cent from ₦3.18 billion lost to fraudsters across banking platforms in Q4 2022.

According to the latest banking fraud and forgeries report by FITC, a total of 12,553 cases of fraud were recorded within the review period.
The FITC data also revealed that there was a 79.44 per cent decrease in the total amount involved in fraud cases in Q1 2023 compared to the previous quarter, with a decrease from ₦12.58 billion to ₦2.59 billion.

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According to the report, the total number of fraud cases reported in Q1’23 also declined by 14.07 per cent from a total of 14,609 cases recorded in Q4’22 to 12,553 cases reported in the review quarter.

More so, the report noted that fraud occurred mostly through mobile, computer/web, and PoS, which was consistent with the trend from the previous quarter.

The report read, “For Q1 2023 under review, an analysis of the magnitude-based ranking of fraud categories shows that mobile fraud has the highest ranking which accounts for ₦1.1bn (42.72 per cent), and this is followed by the computer/web fraud category at ₦646m (24.99 per cent). This was followed by PoS fraud at ₦450m (17.41 per cent) and fraudulent withdrawals at ₦139m (5.36 per cent).”

From the total amount lost in Q1’23, the data also revealed that mobile fraud accounted for 34.07 per cent at ₦161m followed by computer/web fraud accounting for 27.69 per cent at ₦130m and fraudulent withdrawals representing 24.72 per cent at ₦116m.
While lauding the banking institutions’ overall decrease in fraud incidences, the amount involved, and the actual amount lost, FITC stated that banks must further strengthen their internal control measures for increased effectiveness in anticipating fraud activities and, ultimately, fraud prevention. It was further stated that enhanced customer awareness of the incidence of fraud activities and how to safeguard themselves from them was necessary to support internal control efforts.

“Banks should invest in modern fraud detection technologies such as machine learning algorithms and artificial intelligence (AI) tools that can identify and flag suspicious transactions and patterns. Additionally, regular risk assessments can help identify potential vulnerabilities and threats to the banking system,” it advised.”

FITC’s institutional members are members of the Nigerian Banker’s Committee, which comprises the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporation and all licensed banks in Nigeria.

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