Nigerian commercial banks have lost a staggering N42.6 billion to fraud and forgeries in just three months from April to June 2024, surpassing the total amount lost throughout the entire year of 2023, which stood at N9.4 billion.
This was revealed in the Financial Institutions Training Centre’s (FITC) Q2 2024 Fraud and Forgeries report, released on Saturday
The report which highlighted a sharp rise in fraudulent activities across banking platforms and based on data from 28 deposit money institutions showed that 80 fraud and forgery cases were reported in the quarter. Of these, 26 were reported in April, and 27 in both May and June.
The report revealed an 8,993 percent increase in fraud-related losses compared to N468.4 million lost in Q1 2024. Additionally, the losses in Q2 2024 represent a 637 percent rise from the N5.7 billion recorded in Q2 2023.
FITC identified “miscellaneous and other fraud” as the leading category, accounting for 96.46 percent of the total loss, valued at N41.14 billion.
Fraudulent withdrawals and computer/web fraud followed, with losses amounting to approximately N781.2 million and N400.7 million, respectively.
The report also showed a dramatic 1,784 percent increase in the total amount involved in fraud cases, jumping from N2.9 billion in Q1 to around N56.3 billion in Q2 2024. Fraudulent activities occurred across various platforms, including ATMs, online banking, bank branches, and point-of-sale terminals.
Interestingly, card fraud saw a sharp decline of 47.66 percent, dropping from 21,469 cases in Q1 to 11,237 in Q2.
On the other hand, cheque and cash-related frauds rose by 36.67 percent and 9.09 percent, respectively, with cheque fraud increasing from 30 cases in Q1 to 41 in Q2, and cash-related fraud rising from 209 to 228 cases.
The rise in cash-related fraud is likely fueled by ransom demands from bandits in kidnapping cases. The data also highlighted an alarming 31,497 percent increase in losses through bank branch-related channels, rising from N133.9 million in Q1 to N42.2 billion in Q2.
Computer and web frauds saw a similarly large increase, with losses rising by 1,560 percent from N24 million to N400.8 million.
In contrast, mobile fraud saw a decline, with losses dropping by 59 percent from N216.4 million in Q1 to N88.7 million in Q2. ATM-related fraud did not record any significant losses.
In response to the surge in fraud, the FITC recommended banks enhance their monitoring and auditing systems, utilizing AI-driven tools to flag unusual transactions.
The Centre also advised implementing multi-factor authentication and role-based access controls to limit unauthorized access to sensitive financial files. Regular unannounced internal audits were also suggested as a way to promptly address irregularities.
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