Stakeholders in Nigeria’s financial sector are raising alarms over a dramatic spike in fraudulent activities targeting banks.
The Fraud and Forgery Report for the third quarter of 2024, released by the Financial Institutions Training Centre (FITC), highlights an alarming rise in fraud cases and attempted thefts, posing a serious challenge to the country’s financial stability.
Key Highlights from the FITC Report
The report reveals a startling 65% increase in fraud cases, which rose from 11,532 in the second quarter (Q2) to 19,007 in the third quarter (Q3) of 2024. The financial impact is equally concerning, with fraudsters attempting to steal a staggering N115.9 billion, a 105% increase compared to the N56.6 billion targeted in Q2.
While the total attempted amount soared, actual losses were contained at N10.1 billion, reflecting a 75.4% decrease from the N42.8 billion lost in Q2.
Cumulative Fraud Losses in 2024
Data for the first nine months of 2024 paints a troubling picture, with cumulative losses amounting to N53.4 billion, a significant increase from the N9.4 billion lost throughout 2023.
The quarterly breakdown of losses is as follows:
- Q1: N468.4 million
- Q2: N42.8 billion
- Q3: N10.1 billion
Fraud Trends and Channels Under Attack
The report emphasizes that fraud is escalating across all digital and physical transaction platforms. Key types of fraud include:
- Computer/Web Fraud
- Mobile Fraud
- Point-of-Sale (POS) Fraud
Fraud incidents involving card transactions rose by 54.2%, from 11,237 cases in Q2 to 17,314 cases in Q3. Similarly, cash-related fraud cases surged by 125%, from 228 cases in Q2 to 517 cases in Q3.
On the positive side, cheque-related fraud declined by 48.8%, dropping from 41 cases in Q2 to just 21 cases in Q3, reflecting reduced reliance on cheques in Nigeria’s increasingly digital financial landscape.
Stakeholder Concerns and Recommendations
Stakeholders in the financial sector have voiced concerns about the growing sophistication of fraudsters. Dr. Chizor Malize, Managing Director of FITC, noted the critical impact of these crimes:
“The increasing rate of fraud affects businesses and is eroding trust in the financial service sector. All channels we use for transactions today—web, computer, mobile, and PoS—have become targets for fraudsters.”
To combat the rising threat, Malize advocated for the adoption of Artificial Intelligence (AI) to detect and prevent fraud in real time:
“As the Fraud Risk Report underscores, there is an urgent need for leveraging AI to mitigate risks and bolster the stability of the financial system.”
Mr. Pattison Boleigha, MD/CEO of Pattison Consulting Limited, echoed the sentiment, calling for greater regulatory oversight and the integration of AI-driven tools across financial institutions to strengthen defenses.
Meanwhile, Mrs. Favour Femi-Oyewole, Group Chief Information Security Officer at Access Bank, stressed the importance of robust cybersecurity frameworks:
“We can compete on models; we can compete on strategies… When it comes to cybersecurity, we are all faced with the same common enemy.”
Join our Channel...