Forty-Nine Bank Staff Sacked for Committing Financial Fraud – FITC Report Reveals

Nigerian depository banks have fired 49 employees for their involvement in fraudulent activities between April and June this year.

The Financial Institutions Training Centre (FITC) revealed this in its recently released Fraud and Forgery Report for Q2 2024.

This marks a 40% increase in the number of employees fired compared to 35 cases fired in Q1 2024.

According to the report, 58 bankers were involved in 11,532 fraud cases reported during the reporting period.

This marks a 23% increase compared to 47 insider holdings reported in Q1 2024. The FITC report also revealed that the involvement of outsiders in fraud cases increased by 5.20% from 10,397 cases in the first quarter of 2024 to 10,938 cases in the second quarter.

Losses from fraud

Meanwhile, banks’ losses from financial fraud increased by over 9.00% to 42.6 billion naira in the second quarter of this year, compared to 468.4 million naira in the first quarter. This also represents a 637% increase compared to the loss of 5.7 billion naira in the second quarter of 2023.

Excluding the first quarter’s records, the losses in the second quarter of 2024 alone exceeded the total losses banks suffered from fraudulent activities in the entire year of 2023.

An analysis of last year’s FITC data revealed that banks suffered a total loss of 9.4 billion naira in the same year. In terms of types of fraud, FITC said that “other types of fraud” were the largest losses, accounting for 96.46% of the total losses, amounting to 41.14 billion naira.

This was followed by losses from unauthorized withdrawals and computer/internet fraud, which amounted to about 781.2 million naira and 407 million naira, respectively.

Recommendations for banks

In its recommendations, FITC called on banks to leverage technology to minimize fraudulent activities in the system.

With regard to the increase in insider involvement in particular, the center recommended that banks strengthen access controls by limiting access to accounting files to a small group of vetted authorized employees who have appropriate authorizations and are regularly trained on the latest security protocols.

“The implementation of multi-factor authentication (MFA) and role-based access controls (RBAC) can aid the reduction of the risk of unauthorized changes to settlement files,” FITC explained.

It was also stressed that banks should step up fraud prevention training for all employees, focusing on the latest fraud tactics and key red flags, especially in fast-growing areas such as card-related and web-based fraud.

What you need to know

● The FITC report is based on fraud and forgery reports received from 28 depository institutions across the country.

● FITC said it received 80 such reports during the quarter under review.

● Further analysis revealed that 26 reports were submitted in April, while 27 reports were received in May and June.