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Banks’ losses to frauds hit N5.79 billion in Q2 2023 – FITC

Commercial banks in Nigeria lost a total of N5.79 billion to fraud activities in the second quarter of this year, FITC has revealed.

This amount represents a 1,125.03% increase in losses compared with the N472 million lost in Q1 2023.

The FITC in its Q2 Fraud and Forgeries report, pointed out that the losses were recorded by 24 banks that filed their returns on fraud cases for the period.

The data also indicated that there was a significant increase in the total amount involved in fraud cases during Q2 2023 compared to the previous quarter.

The sum increased from N2.58 billion to N9.75 billion, representing a 276.98% increase.

Fraudulent loans top losses

According to the report, incidences of fraudulent loans accounted for the highest loss at 94.35% with a value of N5.46 billion. This was followed by mobile fraud, which represents 3.39% of the total loss amounting to N196 million.

FITC said Computer/ Web fraud was minimal for the period under review as it amounted to only 1% of the total losses in Q2. N59.5 million was lost through the web in the 3 months.

Decline in volume

Despite the significant increase in the value of fraud in the second quarter, there was a decline in the number of cases recorded compared with the previous quarter.

  • “For the second quarter of 2023, a total of 11,679 cases were reported and when compared to the 12,553 cases recorded in the Q1, a 6.96% decrease is noted. The data for the first quarter of 2023 indicates that mobile fraud, computer/web fraud, and POS-related fraud were the three most prevalent types, continuing the trend observed in the first quarter 0f 2023,” FITC stated in the report.

While the FITC data captured both electronics and non-electronics frauds in the banks for Q2 2023 alone, the Nigeria Inter-Bank Settlement System (NIBSS) had recently disclosed that the banks had as of this August lost N9.5 billion to e-frauds alone.

Adding the non-electronic figure to this would mean that over N10 billion have been lost by the banks so far this year.

Strengthening security in banks

Considering the rise in the total amount involved in fraud cases and the amount lost, FITC urged Nigerian banks should strengthen their security protocols and systems to prevent unauthorized access to customer accounts and sensitive information.

According to the organization, this may involve incorporating measures such as multi-factor authentication, implementing strong encryption techniques, and ensuring regular security updates are in place.

  • “Also, banks should utilize advanced fraud detection systems and technologies that can analyze patterns, identify anomalies, and detect suspicious activities in real time. These systems which employ Artificial intelligence (AI) and Machine Learning (ML) can help identify potential fraud incidents and trigger alerts for further investigation.
  • “It is also important to perform regular audits of internal systems, processes, and controls to identify any vulnerabilities or weaknesses that could be exploited by fraudsters and bank staff,” FITC advised.

FITC is a not-for-profit professional organization, which has the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), and all licensed banks in Nigeria as members.


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