Banks lose N5.79bn to fraudsters in Q2 2023

Commercial banks in Nigeria are facing substantial financial losses due to fraud with a significant increase in insider involvement according to the Fraud and Forgeries (FITC) report.

Insider connivance, involving employees of the banks, is suspected in several cases, making it challenging for these companies to secure their systems effectively.

In its Q2 2023 Fraud and Forgeries report, FITC revealed that commercial banks in Nigeria lost a total of N5.79 billion to fraud activities in the quarter.

This amount represented a 1,125.03% increase in losses when compared with the N472 million lost in Q1 2023.

READ ALSO: Keystone, Heritage Banks in fresh trouble over N222.6m tax liabilities

The FITC pointed out that the losses were recorded by 24 banks that filed their returns on fraud cases for the period.

The data also indicated that there was a significant increase in the total amount involved in fraud cases during Q2 2023 compared to the previous quarter.

The sum increased from N2.58 billion to N9.75 billion, representing a 276.98% increase.

Based on the FITC report, in the same period, there was also a 20.55% increase in insider involvement in the frauds committed across the bank in the second quarter of this year.

This prompted the FITC to caution the banks to be more vigilant about the type of people they employ.

“Considering the increasing instances of employees engaging in fraudulent activities, banks should exercise heightened vigilance when hiring new staff or contracting outsourcing firms for employment purposes. To prevent staff involvement in fraudulent behaviour, it is recommended to acknowledge and reward employees who have demonstrated exceptional integrity in situations where they could have acted otherwise,” FITC advised.

Obviously, the Nigerian fintechs will also need to take a cue from the FITC’s advice as they continue to battle the outside and inside forces that are bent on running them down through fraud.