Fraud, cyber-crime in Nigerian Banks increase by 539%

Latest information released by the Nigeria Deposit Insurance Commission (NDIC), posted on its website on Friday, shows that the Nigerian banking industry lost N15.15 billion to cyber-crime and forgeries in 2018.

This amount was 539% higher than the N2.37 billion recorded in 2017.

According to NDIC, the rising cases of fraud in the banking system could be attributed to the internet and technology-based channels and instruments.

The NDIC report reads: “The increase in the sophistication of fraud-related techniques such as hacking, cyber-crime as well as I.T related products and usages, fraudulent withdrawals and unauthorized credit are the sources through which the perpetrators operate.”

According to the report, a total of 37,817 fraud cases which stood at N38.93 billion were reported in 2018, over 11,000 more than the 26,182 recorded fraud cases amounting to N12.01 billion in 2017.

The report showed that the number of Automated Teller Machines (ATM)/card-related fraud cases declined to 10,063 in 2018. This decline was attributed to the improved security features of the cards as well as security awareness on the part of the users.

Specifically, NDIC stated that internet and technology-based channels accounted for 59.2% of fraud cases and 42.83% of actual total loss suffered during the year.

However, there was an increase in the number of web-based fraud cases to 12,343 in 2018 from 7,869 in 2017.

It was further revealed in the report that a total number of 899 staff were involved in fraud and forgery cases during the year, representing over 60% rise when compared to 120 recorded in the previous year.

394 temporary staff were involved in fraud cases, accounting for 43.83% of the total number of staff involved in fraud. Of the total number of staff, 206 or 22.91% was perpetrated by Officers and Executive Assistants’ Cadre Fraud cases supervisors and managers accounted for 13.24% or 199 cases.

The NDIC noted that with the consistent rise in the number of temporary staff involvement in fraud and forgery cases, the deposit money banks, as well as the regulators, need to address the problem of temporary or contract staff in terms of welfare and permanent employment in view of the risk their current position poses on the bank’s operations.