The total amount of money lost to fraudulent activities in Africa’s biggest economy has surged by 207.9 percent in the three months ending September of 2022, according to the latest report on Frauds and Forgeries in Nigeria Banks.
The report published by the Financial Institutions Training Centre (FITC), said the sum rose to N3.6 billion in Q3 from N1.2 billion in the previous quarter, while the sum reported to be involved in fraud cases increased slightly by 9.5 percent to N9.62 billion.
“There was an increase reported in both the total amount involved in and the actual or expected amount lost to fraudulent activities,” it said.
It said the e-Naira continues to be featured as an instrument of fraud with the banking system.
Read also: CeBIH urges collaboration to tackle e-payment fraud
It added that there was sustained increase in the amount involved in and lost in bank branch fraud.
“As a result of compromised personal banking details or misuse of service platforms, customers are increasingly vulnerable to fraud incidents in Q3 as in previous quarters.”
The report revealed that the fraud activities were performed using a range of channels, including Automatic Teller Machines (ATM), Web, and mobile banking platforms (including the eNaira), bank branches and Point of Sales (PoS) terminals.
A Breakdown of the report showed that amount involved through ATM channels rose by 9.7 percent to N222 million, Bank rose by 20.8 percent to N3.71 billion, mobile was 69.7 percent (N1.67 billion) and PoS was 26.9 percent (N393 million)
“On the other hand, a decrease was only noted for fraud through the web channel from N3.6 billion to N2.6 billion which is a 27.6 decrease from the previous quarter, it said.
According to stakeholders in the digital industry, the growing cyber security threats which can also be associated with fraud activities could ultimately hinder financial inclusion.
Assane Gueye, professor at Carnegie Mellon University Africa said as more people are moving into the financial inclusion net, we should be mindful of the things that can hinder the successes of it such as cyber security attacks.
He said while we are developing the technologies to include more people, it should be more secure or preserve peoples’ data and privacy and also align with people’s reality. “We should be more intentional that these technologies will bring more good and not harm.
A recent document titled ‘Financial Inclusion and Cybersecurity in the Digital Age’ by Kristalina Georgieva, managing director at International Monetary Fund (IMF) said the world is becoming more reliant on digital financial services; hence the increase in cyber attacks.
“COVID-19 accelerates our digital advancements, and opportunities are multiplying at an even faster pace. But so are the risks.
“And if we want to harness the great power of technology to lift people up, we need to deal effectively with the threats that can bring technology down and harm lives and livelihoods,” Georgieva said.
The FITC report recommends that it is necessary for banks to improve internal control measures so that fraud activities are proactively prevented.
“There is also a need to review fraud control measures in place in the physical bank branches as there was a sustained increase in the amount involved in fraud activities and ultimately the increase in the amount lost in bank branches.
“To reduce incidences of fraud within the branches of the bank, all fraud control touchpoints must be reviewed critically for loopholes and when these loopholes are identified, efforts must be made to close the gaps to avoid future occurrences,” it added.
It said as always, banks should continue the on-going sensitisation of their customers on the need to protect their personal details across various channels and banking platforms.