Babatunji Wusu –
- Fraud incidents in Nigerian bank branches increased by 31% in Q2 of 2024.
- Total reported losses from fraud reached N42.33 billion in the first half of 2024.
- A significant rise in computer and web fraud was recorded, up by over 1,500%.
- Mobile fraud saw a sharp decline, and ATM fraud remained absent.
- Legal actions are intensifying, including a court order to freeze 818 accounts linked to a N10 billion cyberattack.
- Experts urge increased vigilance, advanced fraud detection systems, and collaboration between stakeholders to address the growing threat.
The Nigerian banking sector is grappling with an alarming rise in fraudulent activities, with a 31% increase in fraud incidents reported in bank branches during the second quarter of 2024. According to the Financial Institutions Training Centre (FITC) Fraud and Forgeries report, the country’s financial system is facing significant challenges, with fraudulent activities leading to a staggering N42.33 billion in losses during the first half of 2024.
Notably, fraud in physical bank branches surged dramatically, with reported losses escalating to N42.2 billion in the second quarter, compared to just N133.9 million in the first quarter. Meanwhile, computer and web fraud saw an extraordinary increase of 1,560.3%, rising from N24 million to N400.8 million. In contrast, mobile fraud dropped significantly, with losses falling by 59% from N216.4 million to N88.7 million.
While card fraud experienced a notable decrease of 47.66% and ATM-related fraud remained absent, cheque-related fraud rose by 36.67%. The decline in mobile fraud losses was particularly steep, plummeting by 99% from N21.6 billion in the first quarter to N216.36 million in the second quarter, highlighting the shifting tactics of fraudsters.
In response to the growing fraud epidemic, legal actions have intensified. In one significant case, the Abuja Federal High Court froze 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank. This was done in connection with a police motion against the perpetrators, including several financial institutions.
The rising trend of fraud underscores the urgent need for enhanced vigilance, more robust security measures, and regulatory interventions. Experts recommend that banks invest in cutting-edge fraud detection systems, conduct regular staff training, and improve internal controls. Additionally, collaboration between financial institutions, law enforcement agencies, and regulators is crucial to combat the evolving threat and ensure the safety of Nigeria’s financial system.
The FITC report serves as a stark reminder of the vulnerabilities within the banking sector and highlights the necessity for proactive measures to protect both the economy and consumer trust.
