CEM REPORT, FINANCE | In 11,679 cases fraud cases recorded in the second quarter of 2023 (Q2’23) commercial banks in Nigeria lost ₦5.79 billion.
The amount lost is an increase of 1,125.03 per cent from ₦472 million recorded in Q1’23.
The data is from the fraud report filed by 24 commercial banks for the period, compiled by the FITC in its Fraud and Forgeries report, for Q2’23.
While the number of fraudulent cases declined by 6.96 per cent from 12,553 cases recorded in Q1 to 11,679 cases in Q2, the amount involved in fraudulent cases appreciated by 276.98 per cent from ₦2.58 billion to ₦9.75 billion.
The data for Q2’23 indicates that mobile fraud, computer/web fraud, and POS-related fraud were the three most prevalent types, continuing the trend observed in the first quarter of 2023, FITC stated in the report.
According to the report, incidences of fraudulent loans accounted for the highest loss at 94.35 per cent recording a value of ₦5.46 billion. This was followed by mobile fraud, with 3.39 per cent of the total loss amounting to ₦196 million.
While ₦59.5 million was lost through the web. The FITC report details that Computer/ Web fraud was minimal for the period under review as it amounted to only 1% of the total losses in Q2.
According to the organization, this may involve incorporating measures such as multi-factor authentication, implementing strong encryption techniques, and ensuring regular security updates are in place.
FITC advised strengthening security protocols and systems to stop unauthorized access to client accounts and sensitive data to stop the tide of fraud in the Nigerian banking industry.
The organization states that this can entail adding safeguards like multi-factor authentication, putting robust encryption methods in place, and making sure frequent security updates are in place.
According to the organization, this may entail deploying safeguards such as multi-factor authentication, and strong encryption techniques, and ensuring regular security updates are in place.
“Also, banks should utilize advanced fraud detection systems and technologies that can analyze patterns, identify anomalies, and detect suspicious activities in real time. These systems which employ Artificial intelligence (AI) and Machine Learning (ML) can help identify potential fraud incidents and trigger alerts for further investigation.
“It is also important to perform regular audits of internal systems, processes, and controls to identify any vulnerabilities or weaknesses that could be exploited by fraudsters and bank staff,” FITC advised.
FITC is a not-for-profit professional organization, which has the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), and all licensed banks in Nigeria as members.
Recall a CEM report where the Nigeria Inter-Bank Settlement System (NIBSS) disclosed that the banks had as of this August lost ₦9.5 billion to e-frauds alone.
Fraud losses have increased dramatically over the last five years with about ₦3 billion recorded in 2019 and about ₦9.5 billion in 2023.