Nigerian bank workers’ involvement in fraud rises by 250% in Q3 2022 —Report

Key highlights

  • A total of 112 bank staff were involved in fraud between July and September last year, surpassing 32 recorded in the same period in 2021.
  • Out of the 112, 20 had their appointments terminated by the banks.
  • Meanwhile, outsider involvement in banking fraud decreased in the period under review.

The number of bank employees involved in fraud increased by 250% year on year to 112 in Q3 2022 from 32 recorded in Q3 2021 according to a report released by FITC.

The report, which gave insights into fraudulent activities in Nigerian banks between July and September 2022, further reveled that 20 of those involved in fraudulent activities were sacked by the banks within the period. This also shows a 42.86% increase compared with 14 sacked in Q3 2021 for a similar offence.

With a total of N3.62 billion lost to frauds perpetrated through ATM, PoS, Mobile and other electronic channels, and cash, FITC said all cash theft cases reported within the period was carried out by bank personnel.

Nigerian bank employees involvement in fraud

Decrease in outsider involvement

While noting that more insiders are now getting involved in banking frauds compared with outsiders, FITC said:

  • “There was a notable decrease of 31.21% in outsider involvement in fraud cases from 23,440 cases in the previous quarter to 16,125 cases in Q3 2022. On the other hand, staff involvement increased from 73 cases to 112 cases representing a 34.82% increase quarter on quarter.”

Advice to banks

Recommending measures to minimize incidences of fraud, FITC said the banks must improve internal control measures so that fraud activities are proactively prevented. It said there is also a need for the banks to review fraud control measures in place in the physical bank branches as there was a sustained increase in the amount involved in fraud activities and ultimately the increase in the amount lost in the bank branches.

  • “To reduce incidences of fraud within the branches of the bank, all fraud control touchpoints must be reviewed critically for loopholes and when these loopholes are identified, efforts must be made to close the gaps to avoid future occurrences.
  • “As always, banks should continue the ongoing sensitization of their customers on the need to protect their personal details across various channels and banking platforms,” it said.

What you should know

The report further gives credence to wide speculations that most fraudulent activities in bank customers’ accounts were being carried out in connivance with bank staff.

With the recent ‘Japa’ trend hitting the IT departments of most Nigerian banks, there has been an increase in the number of bank customers losing their money to fraud. Some banks’ insider sources have also fingered tech staff who are planning their exit as committing some of the atrocities to get enough money to fund their travel.