N1.77bn Lost By Four Nigerian Banks To fraud In 2021, Says Report

Four Nigerian deposit money banks lost a total of N1.77bn to fraudulent activities involving the banks’ employees and consumers in 2021.

This was contained in the 2021 financial statements of the banks.

The banks are Access Bank Plc, Guaranty Trust Bank Plc, First Monument City Bank, and Wema Bank.

The Nigeria Inter-Bank Settlement System, a company saddled with the responsibility of providing infrastructure for interbank transactions in the country, said Nigeria’s adoption of several electronic channels continued to rise as N271.95tn worth of transactions were recorded on its platform in 2021 compared to N158.21trn that changed hands on the platform in 2020.

Transactions via mobile channels increased significantly by 164.4 per cent in 2021 to N8.06trn as against N3.05trn recorded in 2020.

In a blog post recently published on its website, the company said that Nigeria has some of the most advanced payment electronic payment capabilities in the world.

The NIBBS however warned that “the increase in transaction processing, speed and available channels comes with an unavoidable side effect– more vectors for fraudulent activities.”

NIBSS had earlier said that fraud-related transactions cost Nigerian banks an average loss of N14bn yearly.

According to their financial statements, WEMA and GTB incurred the biggest losses as a result of fraud within the period under review, as they lost N670.73 and N511.9m respectively.

For Wema Bank, the cost of fraud rose by N27.46m, year on year, as the loss incurred in 2020 was N643.277.

In the case of GTB, the fraud losses were almost tripled in 2021.

At N511.9m, the losses the bank incurred due to fraudulent activities rose by N337.5m from N174.40m recorded in 2020.

GTB also disclosed that it recorded 15,204 cases of fraud and forgeries in 2021 involving N1.2bn.

Access Bank revealed that while it lost N502m to fraud in 2021, third parties lost about N1.98bn.

The bank also said that it recorded a total of 17,697 cases of fraud in 2021, majorly comprising Electronic Fraud/USSD (17,911), Cash Theft/ Suppression/Pilferage/Dry posting (33), Fraudulent Transfer/Withdrawals/Reactivation of account (16), and Armed Robbery (6).

During the review period, FCMB’s losses as a result of fraud climbed from N59.03m to N89.8m.

Speaking on the development, a cybersecurity expert, Olugbenga Odeyemi, advised banks to adopt sophisticated measures to mitigate current cyber threats and intensify their efforts in educating customers on ways to avoid falling prey to fraudulent actors.

Odeyemi, an ICT expert and Senior Partner at e86 Limited, said, “I think there is a gap on the education of customers on what to do and what not to do. Times are hard, and those into crimes are inventing new ways to move forward.

“So, banks, especially the central bank, need to be steps ahead of those in financial crimes. They should think ahead and come up with certain measures that would mitigate cyber fraud and attacks, and ensure that their customers are well educated on how not to become preys.”

He also urged banks to hire qualified cybersecurity personnel to monitor their ICT space.