Nigerian banks lost a total of N2.09 billion to frauds in Q4 2023 with mobile emerging as the top channel through which the largest amount was lost.
This was revealed in the latest Fraud and Forgeries report released by the Financial Institutions Training Centre (FITC). According to the report, the N2.09 billion loss recorded in Q4 was a 77.58% increase compared with N1.18 billion lost by the banks in Q3 2024.
FITC in the report also revealed that a total of 12,405 cases of fraud were recorded in Q4 2024. When compared to the 12,066 cases recorded in Q3, this shows a 2.81% increase.
- “The data for the last quarter of 2023 indicates that computer/web fraud, mobile fraud, and POS-related fraud were the three most prevalent types of fraud, continuing the trend observed all year round in 2023,” the report added.
However, in terms of the actual loss through the channels, FITC said mobile fraud accounted for the highest loss at 17.039% with a value of N356.57 million, while suppression of cash entries accounted for 3.75%, totaling N78.45 million.
Source: FITC Fraud and Forgeries report
Amount lost through other channels
The report noted that there was an overall increase in the amount lost across all channels except for Bank Branch which recorded a decline and Van and Agents which didn’t record any fraud cases, while the amount lost via the web, bank branch, and PoS channel decreased.
- “In their order of magnitude, the amount lost through the ATM channel grew by 711.15%, raising the value to 40.47 million from N4.99 million in Q3. POS fraud also witnessed a surge in the amount lost by 95.01% from N7.5 million to N14.6 million.
- “For Web fraud, the amount lost increased significantly by 50.49%, rising from N19.12 million to N28.77 million. However, bank branch-related frauds saw a decline of 59.73%, with the amount lost shrinking from N884.96 million in the previous quarter to N356.34 million in Q4 2023,” it said.
Strengthening security in banks
Advising the banks to respond adequately to the rising cases of fraud, FITC said Nigerian banks will need to invest heavily in upgrading and fortifying their digital infrastructure. This, it said, involves implementing cutting-edge cybersecurity measures, robust identity verification systems, and real-time transaction monitoring.
According to the organization, regular security audits and penetration testing are essential for promptly identifying and addressing system vulnerabilities.
- “Furthermore, banks should prioritize customer and employee education to raise awareness about prevalent fraud schemes and promote effective prevention practices. Collaborating closely with law enforcement agencies is crucial to enhancing the capacity for investigating and prosecuting fraud cases.
- “Regulatory compliance should be a top priority, requiring banks to stay current with evaluating regulations related to fraud prevention and data security.
- Compliance not only ensures adherence to legal standards but also demonstrates a commitment to safeguarding customers’ financial assets,” FITC advised.
It added that following these recommendations would empower Nigerian commercial and merchant banks to better protect themselves and their customers against fraud and forgeries in the current situation.
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