Nigerian banks experienced a significant reduction in financial fraud losses in the first quarter of 2024, with losses decreasing by 77.62% compared to the previous quarter.
The Financial Institutions Training Centre (FITC) highlighted this in its latest Report on Fraud and Forgeries in Nigerian Banks for Q1 2024.
According to the report, Nigerian banks lost ₦468.42 million in the first quarter, a substantial drop from the ₦2.09 billion loss recorded in Q4 2023.
In terms of the amount involved in fraud, the report revealed that a total of ₦2.99 billion was involved in fraudulent activities in Q1, representing a 56.73% decline from the ₦6.91 billion recorded in the previous quarter.
The FITC report also indicated a decrease in the number of fraud cases reported by the banks. In Q1 2024, 11,472 cases were reported, compared to 12,405 cases in Q4 2023, marking a 7.52% decrease.
The report identified computer/web fraud, mobile fraud, and POS-related fraud as the top three prevalent forms of fraudulent activity, consistent with trends observed in the previous quarter.
Breakdown of Fraud Losses
Mobile fraud accounted for 46.29% of the total losses recorded by banks in Q1 2024, amounting to ₦216.83 million, while computer/web fraud entries accounted for 17%, totaling ₦79.61 million.
“During Q1 2024, fraudulent activities were conducted through various channels, including ATMs, online platforms such as web and mobile banking, bank branches, and point-of-sale (POS) terminals,” the FITC report stated.
Cards were the only instrument for fraud that recorded an increase in Q1 2024. There was a 31.12% rise in fraud cases through the POS channel, from 2,683 cases in Q4 2023 to 3,518 cases in Q1 2024.
Similarly, fraud cases through the mobile channel increased by 0.45%, from 3,173 cases in Q4 2023 to 3,393 cases in Q1 2024.
While acknowledging the decline in fraud activities and losses in Q1 2024, FITC emphasized the need for banks to be more vigilant and to enhance their fraud control measures. This will ensure that the numbers continue to drop in the future.
FITC suggested that banks should adopt advanced fraud detection technologies and analytics to continuously monitor transactions for suspicious patterns and anomalies.
The report specifically recommended leveraging emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Robotics Process Automation (RPA), Advanced Analytics, and Predictive Modelling to identify patterns of fraud and proactively detect emerging frauds.
