Surge in Fraudulent Activities Hits Nigerian Banks: FITC Reports 31% Increase in Q2 2024
The Financial Institutions Training Centre (FITC) has raised alarms over a sharp increase in fraudulent activities within Nigerian banks, with fraud incidents in branches surging by 31% during the second quarter of 2024.
According to FITC’s Fraud and Forgeries report, the total losses from fraudulent activities amounted to a staggering N42.33 billion in the first half of 2024, signaling significant threats to the integrity of Nigeria’s financial system.
Escalating Fraud in Bank Branches
The report highlighted a dramatic rise in fraud occurring at bank branches, with recorded losses escalating from N133.9 million in the first quarter to an eye-watering N42.2 billion in the second quarter.
Shifts in Fraudulent Strategies
The FITC report also pointed to changing trends in fraudulent activities:
- Computer and Web Fraud: Losses skyrocketed by an alarming 1,560.3%, increasing from N24 million in Q1 to N400.8 million in Q2.
- Mobile Fraud: A significant decline of 59% was observed, dropping from N216.4 million in Q1 to N88.7 million in Q2.
- Card Fraud: Cases fell by 47.66%, decreasing from 21,469 incidents in Q1 to 11,231 in Q2.
- Cheque Fraud: Conversely, cheque-related fraud rose by 36.67%, from 30 cases in Q1 to 41 in Q2.
No ATM-related fraud cases were recorded during the reporting period, marking a rare bright spot amidst otherwise concerning trends.
High-Profile Cyberattack and Legal Actions
Highlighting the growing threat, a Federal High Court in Abuja issued a 30-day freeze on 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank. The court’s October 15 ruling followed a motion filed against James Akagwu Isaac and other suspects.
Recommendations for Mitigation
Experts emphasize the need for immediate and proactive measures to combat these rising threats:
- Enhanced Security Measures: Banks must invest in advanced fraud detection systems to identify and mitigate fraudulent activities in real-time.
- Staff Training: Regular training programs for employees to recognize and respond to potential fraud are essential.
- Strengthened Internal Controls: Robust internal checks can help prevent unauthorized access and manipulation.
- Collaborative Efforts: Partnerships between banks, law enforcement agencies, and regulators are critical for developing comprehensive anti-fraud strategies.
A Call for Vigilance
While declines in mobile and card fraud offer some optimism, the surge in branch-based and web-related fraud underscores the adaptability of fraudsters. Without sustained efforts, these trends could undermine consumer trust and threaten Nigeria’s economic stability.
FITC’s report serves as a wake-up call, urging all stakeholders in the banking sector to adopt a proactive stance against evolving fraud tactics to safeguard the financial ecosystem.
