As of the second quarter of this year, financial institutions, particularly commercial banks, in the nation lost N5.7 billion to fraud.
11,679 incidents in total were reported, and when compared to 12,553 cases recorded in Q1, a 6.96 percent decline is seen, according to the FITC’s Q2 Fraud and Forgeries Report.
The Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), and all Nigerian banks with licenses are members of the non-profit professional organization known as FITC. 24 institutions that filed returns on fraud cases for the time period reportedly reported the frauds.
Following the pattern seen in the first quarter of 2023, data for the first quarter of 2023 showed that POS-related frauds, computer/web fraud, and mobile fraud were the three most common types of fraud.
The overall amount involved in fraud cases increased significantly by 276.98 percent during Q2 2023 compared to Q1 2023, according to the data.
The amount climbed from N2.58 billion to N9.75 billion, according to FITC. The amount lost also significantly increased, going from N472 million in Q1 2023 to N5.79 billion in Q2 2023, an increase of 1125.03%.
According to the data, there was a 6.4% drop in the number of outsiders involved in fraud cases in Q2 2023, from 12,351 cases in the previous quarter to 11,561 cases. But it found that the number of staff members involved in fraud climbed by 22.22 percent, from 72 cases in Q1 to 88 cases in Q2 2023.
On the other hand, from 15 cases in the first quarter to 11 cases in the second, there were fewer terminated appointments as a result of fraudulent activity, a fall of 26.67%.
Fraudulent Loans received the highest rating in the evaluation of Q2 2023, according to an examination of the magnitude-based ranking of fraud categories, and they accounted for N6.03 billion (61.81 percent) of the total amount.
The category of computer/web fraud came in second with N1.47 billion (15.10 percent). Mobile fraud came in second with N751 million (7.7%), followed by fraudulent withdrawals with N663 million (6.79%).
Fraudulent Loans accounted for the biggest loss at 94.35 percent, with a value of N5.46 billion, per the data on the total amount lost to frauds in the first quarter of 2023, according to FITC.
Withdrawals due to computer/web fraud amounted for 1.03 percent of the total, totaling N59.5 million, while mobile fraud made up 3.39 percent of the total, or N196 million.
In the meantime, FITC encouraged Nigerian banks to tighten their security protocols and systems to prevent unauthorized access to client accounts and sensitive information in light of the rise in the total amount involved in fraud cases and the amount lost.
The organization says that to accomplish this, procedures including multi-factor authentication, strong encryption, and regular security updates may need to be implemented.
“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.
