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A recent report by the Financial Institutions Training Centre reveals that Nigerian commercial banks have experienced a substantial increase in fraud-related losses, with a total of N42.6 billion lost between April and June 2024. This amount surpasses the total losses recorded in the entire year of 2023, which stood at N9.4 billion.
The Q2 2024 Fraud and Forgeries report highlights a concerning surge in fraudulent activities across banking platforms, indicating a growing threat to the financial sector. The significant increase in losses underscores the need for enhanced security measures and vigilance to combat fraud and protect customers’ assets.
The report’s findings suggest that Nigerian banks must intensify their efforts to prevent and detect fraudulent activities, ensuring the integrity and security of their systems and customer transactions.
The FITC report is based on returns on fraud and forgery cases received from 28 deposit money institutions in the country.
According to FITC, 80 of such returns were received in the quarter under review. It said that 26 reports were submitted in April, while twenty-seven 27 reports were received in both May and June.
A breakdown of FITC’s data showed that the Q2 loss shows an 8,993 per cent increase in loss when compared with the N468.4m lost in Q1 2024.
This also represents a 637 per cent increase when compared with the N5.7bn loss recorded in Q2 2023.
FITC said ‘miscellaneous and other fraud’ types constituted the largest loss, representing 96.46 per cent of the total amount lost, with a value of N41.14bn.
This was followed by losses from fraudulent withdrawals and computer/web fraud, amounting to approximately N781.2m and N400.7m, respectively.
According to the report, there was a staggering 1,784 per cent increase in the total amount involved in fraud cases from Q1 to Q2 2024, with the sum escalating from N2.9bn to approximately N56.3bn in Q2.
During the second quarter of 2024, fraudulent activities were carried out through various channels, including ATMs, online platforms like web and mobile banking, bank branches, and point-of-sale terminals.
Among instruments used, card fraud recorded a significant decrease, declining by 47.66 per cent from 21,469 in Q1 to 11,237 in Q2.
In contrast, fraudulent activity involving cheques and cash increased by 36.67 per cent and 9.09 per cent, respectively, with cheques surging from 30 cases in Q1 to 41 cases in Q2, while the use of cash rose from 209 iin the first quarter of 2024 to 228 in the second quarter of 2024.
The increase via cash is likely to be fuelled by the demand for cash ransom for kidnapped citizens by bandits.
A further analysis of the data shows a significant rise in the amount lost across all channels, except for mobile fraud, which recorded a decline.
