The second quarter of 2023, or Q2’23, saw a substantial increase in the number of fraud incidents and the quantity of money stolen, according to the Financial Institutions Training Centre in Nigeria.
The most recent study also reveals that the amount of insider engagement skyrocketed.
The sum total of the fraud cases during the time increased to N9.75 billion, up a staggering 276.98% from N2.58 billion in the quarter before, Q1’23.
Total losses from the event during the time came to N5.79 billion, an astounding increase of 1,125 percent over the N472 million lost in the first quarter (Q1’23).
This was disclosed in the most recent report on fraud and forgeries in Nigerian banks for Q2’23, which was issued Tuesday by the Financial Institutions Training Centre, or FITC.
FITC said that the losses were reported by 24 banks that submitted their reports on fraud cases for the time period, and that employee engagement increased by 22.2% during that time, compared to a 6.4% decrease in outsider involvement.
The Central Bank of Nigeria, CBN, Nigeria Deposit Insurance Corporation, NDIC, all Nigerian banks with licences, and discount houses make up the Banker’s Committee, which owns FITC.
It was founded to offer creative knowledge solutions and capacity development initiatives that would enhance and expand the resources available to the Nigerian financial services industry.
The FITC study states that fraudulent loans accounted for the largest loss at 94.35 percent with a value of N5.46 billion, followed by mobile fraud at 3.39 percent with a value of N196 million.
Only one percent of the overall losses, or N59.5 million, throughout the period were attributable to computer/web (internet) fraud.
According to the report:
“During the second quarter of 2023, there were 11,679 reported cases, showing a 6.96 per cent decrease compared to the 12,553 cases in the first quarter. However, the data indicates a significant increase in the total amount involved in fraud cases. The amount rose from N2.59 billion in the previous quarter to N9.75 billion in Q2, representing a 276.98 per cent increase.
“Additionally, the amount lost also saw a substantial rise, increasing from N472 million in Q1 2023 to N5.79 billion in Q2 2023, which corresponds to an 1125.03 per cent increase. This increase might be attributed to the fact that banks were liable for the losses incurred and had to make refunds to customers.”
It further stated: “In Q2 2023, there was a 6.40 percent decrease in outsider involvement in fraud cases, with the number dropping from 12,351 cases in the previous quarter to 11,561 cases. However, staff involvement in fraud increased by 22.22 per cent, rising from 72 cases in Q1 2023 to 88 cases in Q2 2023. Conversely, the number of terminated appointments related to fraudulent activities decreased by 26.67 per cent, going from 15 cases in Q1 2023 to 11 cases in Q2 2023.”
The Association of Senior Staff of Banks and Insurance Institutions, ASSBIFI, responded by calling the situation a sad development for the country’s banking industry and attributing the rise in staff participation cases to the casualization of employees and other non-pensionable employment practises in the financial industry.
cc: Vanguard Ng
