The Nigerian banking sector has successfully harnessed the power of Artificial Intelligence (AI) to reduce fraud losses by an impressive 77.66% in the first quarter of 2024, according to the Financial Institutions Training Centre (FITC).
FITC said in its latest report that 24 deposit money institutions submitted 25 returns on fraud and forgery cases in Q1 2024, with 20 returns in January, 25 in February, and 30 in March. Despite a rise in card and mobile fraud cases, the total number of fraud incidents decreased by 7.52%, from 12,405 in Q4 2023 to 11,472 in Q1 2024.
“An analysis of the data shows a 56.73% decrease in the total amount involved in fraud cases during Q1 2024 compared to the penultimate quarter. The sum declined from N6.91 billion to N2.99billion. Also, for the total amount lost in 01 2024, there was a substantial decrease of 77.62% from N2.09 billion in Q4 2023 to N468.42 million in Q1 2024,” according to the authors of the FITC report.
FITC: Banks now use AI proactively to combat frauds
The report underscores outsider involvement in fraud cases slightly increased by 0.45%, from 10,350 cases in Q4 2023 to 10,397 in Q1 2024. Staff involvement in fraud declined by 12.96%, from 54 cases in Q4 2023 to 47 in Q1 2024. However, the number of staff terminations due to fraudulent activities saw a significant rise, with 35 employees terminated in Q1 2024 compared to 9 in the previous quarter.
Mobile fraud was as the highest-ranking category, accounting for ₦768.84 million (25.73%) of the total fraud amount, followed by computer/web fraud at ₦680.75 million (22.78%) and POS fraud at ₦565.69 million (18.93%). In terms of losses, mobile fraud led with ₦216.83 million (46.29%), while computer/web fraud accounted for ₦79.61 million (17.00%).
FITC attributes this dramatic reduction in fraud losses to the adoption of advanced technologies, particularly AI, which has enabled banks to identify fraud patterns and detect emerging threats proactively. AI, alongside machine learning, robotics process automation (RPA), and predictive modeling, FITC says, has significantly enhanced the ability of financial institutions to monitor transactions for suspicious activities and anomalies in real-time.
The report also noted a 31.12% increase in fraud cases through POS channels and a 0.45% rise in mobile fraud cases. Conversely, computer/web fraud cases decreased by 30.34%, and bank branch fraud cases saw a 40.10% decline.
FITC emphasizes the need for continuous vigilance and the implementation of proactive measures to ensure the ongoing reduction of fraud cases. The organisation also calls for alignment with regulatory standards and ethical considerations when adopting these emerging technologies.
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