Nigerian banks are battling with a significant rise in insider fraud, with reports from Q2 2024 showing a 23.4% increase in staff involvement in fraudulent activities compared to the previous quarter.
The Financial Institutions Training Centre (FITC) latest report highlights that insider fraud cases surged from 47 in Q1 to 58 in Q2, leading to the termination of 49 employees, a 40% increase from the 35 terminations recorded in Q1.
Overview of Fraud Cases and Trends
The FITC reported receiving 80 returns on fraud and forgery cases from 28 deposit money institutions in Q2 2024. A breakdown shows 26 reports in April and 27 each in May and June. During this period, fraud cases totaled 11,532, a 0.52% increase from 11,472 cases in 01 2024.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The total amount involved in fraud cases skyrocketed by 1,784.94%, jumping from N2.9 billion in Q1 to N56.3 billion in Q2. Similarly, the amount lost to fraud surged by a staggering 8,993.04%, rising from N468,49 million in Q1 to N42,6 billion in Q2.
Prevalent Fraud Types
Computer/web fraud, mobile fraud, and POS-related fraud remained the top categories, consistent with trends observed in 2023 and early 2024. Cases increased by 5.69%, from 4,132 in Q1 to 4,367 in Q2.
Among these, bank branch-related fraud had the highest financial impact, accounting for N54 billion, or 95.63% of the total fraud amount. Web fraud followed at N1.2 billion, with POS and mobile fraud each contributing about N651 million and N547 million, respectively.
Fraud was perpetrated through various channels, including ATMs, web and mobile banking platforms, bank branches, and POS terminals,
Key insights:
ATM Fraud: Cases grew by 3.33%, from, 150 to 155.
Bank Branch Fraud: Cases rose by 3.39%, from 239 to 271
POS Fraud: Cases edged up by 0,43%, from 3,518 to 3,533.
Mobile Fraud: Cases declined by 6,60%, from 3,393 to 3,169.
Financial Impact by Channels
Bank Branch Fraud: In the review of Q2 2024, a magnitude-based ranking of fraud categories indicated that bank branches had the highest impact, with a total loss of around N54 billion, comprising a substantial 95.63% of the overall fraud Losses surged by 31,497.99%, reaching N42.2 billion from #133,9 million in Q1.
Computer/Web Fraud: Web-based fraud accounted for N1.2 billion (2%), while POS and mobile fraud each contributed about 1%, with 651 million and 547 million,
respectively. Losses rose by 1,560,37%, from N24 million to N400.8 million.
Mobile Fraud: Losses decreased by 59%, from N216.4 million in Q1 to N88.7 million in Q2.
A detailed analysis of Q2 2024 data indicates that miscellaneous and other fraud types
constituted the largest loss, representing 96.46% of the total amount lost, with a value of
N41.14 billion.
The alarming rise in fraud calls for urgent measures. Experts recommend strengthening monitoring systems, implementing advanced fraud detection technologies, and enforcing stricter employee compliance protocols to mitigate risks. As fraud continues to evolve, Nigerian banks must bolster their defenses to protect customer trust and ensure operational integrity.