Between the months of April and June in the year 2024, Nigeria saw a staggering loss of ₦42 billion as a result of fraudulent operations that involved point-of-sale (POS) systems, mobile phone networks, and computer systems. These fraudulent operations were carried out in Nigeria.
The Financial Institutions Training Centre (FITC) recently made this information accessible in a study on fraud. The report was made available to the public.
Within the scope of the report that covered the second quarter of 2024, a total of 11,532 incidents of fraudulent activity were documented.
The findings of the FITC’s research indicated that point-of-sale system fraud, fraud involving mobile devices, and fraud involving computers and the internet were the three types of fraud that were most prevalent. It was discovered that this pattern continued throughout the rest of the year 2023 and into the first quarter of the year 2024.
The aggregate value of fraudulent activities in the second quarter was $56.3 billion, indicating a significant rise from the $34.8 billion recorded in the first quarter of 2024. Of the total ₦56.3 billion, around 42.6 billion was attributed to fraudulent activities, with financial institutions managing to recover 13.7 billion.
Mobile fraud, encompassing incidents associated with mobile applications and online banking, accounted for 33.4% of the total reported fraud cases. Fraud associated with point-of-sale transactions represented 24.6% of the overall total, whereas online fraud comprised 16.9%.
The prevalence of computer-based fraud underscores the escalating cybercrime risk in Nigeria’s financial sector. According to the report, bank branches experienced the majority of the losses, representing 95% of the total fraud value.
FITC indicated a persistent challenge regarding internal fraud, highlighting an increase in insider threats. In the analysed timeframe, 49 bank personnel were terminated as a result of their participation in fraudulent activities.
A breakdown of fraud categories by magnitude reveals that bank branches experienced the most significant financial impact, with losses totalling ₦54 billion, which accounts for a staggering 95.63% of the total fraud value.
The subsequent category was web-based fraud, which resulted in losses of ₦1.2 billion (2%). POS and mobile fraud, which each accounted for approximately 1% of the losses, incurred losses of₦651 million and₦547 million, respectively.
The report also identified a substantial decrease in card-related fraud, which decreased by 31.8%, and a significant increase in check and currency fraud, which resulted in substantial financial losses.
Despite the progress made in digital security, the increase in cash-related fraud indicates that criminals are still able to exploit traditional financial instruments.
FITC underscored the necessity of incorporating artificial intelligence and other state-of-the-art technologies to address the increasing sophistication of fraudsters in Nigeria’s financial sector.
It also underscored the significance of proactive measures, such as the continuous training of staff and the upgrading of security systems, to reduce the risk of fraud.
The institute has reported that the financial sector is experiencing a surge in pressure as fraudsters are employing both traditional and modern methods to exploit banks and other financial institutions throughout Nigeria.
“The financial landscape must be protected from future threats through the implementation of more stringent regulatory oversight and the integration of state-of-the-art technology,” it declared.
Fraud and forgeries were alleged to have resulted in a loss of ₦42.6 billion to commercial banks in Nigeria between April and June 2024.