The Financial Institution Training Centre (FITC) of Nigeria has urged Nigerian banks to enhance monitoring and auditing procedures to tackle the N42.6 billion loss to fraud in the second quarter of 2024.
This was disclosed in its latest report on Fraud and Forgeries in Nigerian Banks noting that the total amount lost to fraud surged by 8,993.04 percent, rising from N468.5 million in Q1 2024 to N42.6 billion in Q2 2024.
According to the report, an analysis of the data reveals a staggering 1,784.94 percent increase in the total amount involved in fraud cases from Q1 to Q2 2024 from N2.9 billion to N56.3 billion.
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“In the second quarter of 2024, 11,532 cases were reported, reflecting a 0.52 percent increase compared to the 11,472 cases recorded in Q1 2024,” the report said.
However, the data for Q2 2024 reveals that computer/web fraud, mobile fraud, and POS-related fraud were the three most prevalent types, continuing the trend observed throughout 2023 and into the first quarter of 2024.
FITC emphasised the need to enhance monitoring and auditing procedures stating that deposit money institutions can utilise AI-driven tools that flag unusual entries or patterns to implement continuous and automated monitoring systems that can detect fraud in settlement files.
“Regular unannounced internal audits focusing specifically on settlement processes can be conducted to promptly identify and address any irregularities,” it said.
According to the institution, outsider involvement in fraud cases rose by 5.2 percent compared to the previous quarter, increasing from 10,397 cases in Q1 to 10,938 cases in Q2.
Staff involvement in fraud also increased by 23.4 percent, rising from 47 cases in Q1 2024 to 58 in Q2 2024 and 49 staff appointments were terminated in Q2 2024, an increase from the 35 terminations recorded in Q1 2024.
“In the review of Q2 2024, a magnitude-based ranking of fraud categories indicated that bank branches had the highest impact, with a total loss of around N54 billion, comprising a substantial 95.63 percent of the overall fraud amount,” the company said.
It added that it was followed by web-based fraud, which accounted for N1.2 billion, while POS and mobile fraud each contributed about 1 percent, with N651 million and N547 million.
FITC said access controls should also be strengthened by limiting access to settlement files to only a small group of authorised personnel given the appropriate clearance and are regularly trained on the latest security protocols.
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“The implementation of multi-factor authentication (MFA) and role-based access controls (RBAC) can aid the reduction of the risk of unauthorized changes to settlement files,” It emphasised.
The company highlighted that strengthening ethics and compliance programs is also essential, ensuring that employees fully understand the consequences of engaging in fraudulent activities by considering the significant number of terminations related to fraud in Q2 2024.
“Emphasising the improvement of staff training and awareness is paramount. Intensifying fraud prevention training for all bank employees, with a focus on the latest fraud tactics and key warning signs, especially in rapidly growing areas like card-related and web-based fraud should be a top priority,” the company said.
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