The Nigerian banking industry has cut down fraud losses from ₦2.09 billion in Q4 2023 to ₦468 million in Q1 2024, representing a substantial 77.62% reduction, according to a new industry report.
This sharp decline comes even as instances of card and mobile fraud surged, according to the latest report by the Financial Institutions Training Centre (FITC).
The FITC report reveals that fraud and forgery returns from twenty-four deposit money institutions totaled seventy-five in Q1 2024, with January recording 20 returns, February 25 returns, and March 30 returns. Overall, 11,472 fraud cases were reported, marking a 7.52% decrease compared to the 12,405 cases reported in Q4 2023.
According to the authors of the FITC report, “in the review of Q1 2024, an analysis of the magnitude-based ranking of fraud categories reveal that mobile fraud had the highest ranking, accounting for N768.84 million (25.73%) of the total amount. It was followed by computer/web fraud at N680.75 million (22.78%). POS fraud came next at N565.69 million (18.93%).”
FITC: How Nigerian banks are cutting fraud losses
The data shows a sharp decline in the total amount involved in fraud cases, dropping from ₦6.91 billion in Q4 2023 to ₦2.99 billion in Q1 2024, a 56.73% decrease. Even more significantly, the amount lost to fraud plummeted from ₦2.09 billion to ₦468 million, reflecting a 77.66% decrease.
Outsider involvement in fraud cases saw a slight uptick to 0.45%, with the number of cases rising from 10,350 in Q4 2023 to 10,397 in Q1 2024. However, staff involvement in fraud declined by 12.96%, from 54 cases in Q4 2023 to 47 cases in Q1 2024. Notably, there was a substantial increase in staff terminations due to fraudulent activities, with 35 employees terminated in Q1 2024, up from just 9 in the previous quarter.
According to the FITC report “data on the total amount lost to frauds in the first quarter of 2024, mobile fraud was accounted to have the highest loss at 46.29%, with a value of N216.83 million, while computer/web fraud entries was accounted for 17.00%, totaling N79.61 million.”
According to the authors of the FITC report, “in the review of Q1 2024, an analysis of the magnitude-based ranking of fraud categories reveal that mobile fraud had the highest ranking, accounting for N768.84 million (25.73%) of the total amount. It was followed by computer/web fraud at N680.75 million (22.78%). POS fraud came next at N565.69 million (18.93%).”
Despite the overall reduction in fraud losses, the report states that mobile fraud emerged as the most significant 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%). mobile fraud also led in the total amount lost, with ₦216.83 million (46.29%), while computer/web fraud accounted for ₦79.61 million (17.00%).
The report highlights a 31.12% increase in fraud cases through POS channels and a 0.45% increase in mobile fraud cases. Conversely, computer/web fraud cases decreased by 30.34%, and bank branch fraud cases saw a 40.10% decline.
The FITC report underscores the importance of adopting advanced fraud detection technologies, including AI, machine learning, and predictive modeling, to stay ahead of fraudsters. It calls for continuous vigilance, proactive measures, and alignment with regulatory standards to sustain and improve these positive trends.
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