Financial fraud losses at Nigerian banks decreased significantly in the first quarter of this year, with losses falling by 77.62% from the same period last year.
This was revealed in the recently released Financial Institutions Training Centre (FITC) Report on Fraud and Forgeries Report in Nigerian Banks for Q1 2024.
The research states that Nigerian banks lost N468.42 million in Q1, 2023—a significant decrease from the N2.09 billion they lost in Q4.
According to the study, there was a total of N2.99 billion in fraud during the quarter, which is a 56.73% decrease from the N6.91 billion that was reported during the previous quarter.
The drop in fraud cases that are reported
In addition, compared to the prior quarter, the number of fraud cases that the banks reported decreased, according to the FITC study.
“Eleven thousand, four hundred and seventy-two (11,472) instances were reported for Q1 2024; a 7.52 percent decline is seen when compared to the twelve thousand, four hundred and five (12,405) cases documented in the Q4 2023,” the organization said.
The channels
According to the FITC data, computer/web fraud entries accounted for 17:00%, or N79.61 million, of the total losses reported by the banks in Q1 2024, whilst mobile fraud accounted for 46.29%, or N216.83 million.
“During Q1 2024, fraudulent activities were carried out through a variety of channels, including point-of-sale (POS) terminals, bank branches, ATMs, and online platforms like web and mobile banking.”
“Compared to the previous quarter, the use of cash and checks for fraud activity was comparatively lower in the first quarter of 2024, with cards being the only instrument for fraud that showed an increase.”
“In particular, there was a 31.1 percent increase in fraud instances via the Point of Sale Channel, going from 2,683 cases in Q4 2023 to 3,518 cases in QI 2024. Similarly, the number of fraud instances reported through the Mobile Channel climbed by 0.45%, from 3173 in Q4 2023 to 3393 in Ql 2024, FITC said in the report.
More vigilance is essential
FITC praised the Q1 2024 fall in fraud activity and losses, but also advised the banks to be more watchful, analyze their fraud control efforts, and make improvements to guarantee that the numbers continue to decline moving forward.
It further stated that to continuously monitor transactions for suspicious patterns and abnormalities, banks must guarantee the implementation of cutting-edge fraud detection tools and analytics.
In particular, FITC listed cutting-edge technologies that banks can use to spot trends in fraud and proactively identify new ones, including artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), advanced analytics, predictive modeling, etc.
