Nigerian banks recorded a significant loss of ₦42.33 billion to fraud in the first six months of 2024, according to a report by the Financial Institutions Training Centre (FITC). This alarming figure reflects an exponential rise in fraudulent activities within the country’s financial sector, especially during the second quarter. The report highlights the critical need for banks to strengthen their security frameworks and adopt more robust measures to combat these losses.
The breakdown of the losses reveals a startling trend. While the first quarter of 2024 saw a relatively modest loss of ₦468.4 million, the second quarter witnessed an astronomical increase to ₦42.6 billion, marking an 8,993% surge. This drastic spike underscores the increasing sophistication of fraudsters and the vulnerabilities in the current banking systems. Bank branches were identified as the primary channel for these frauds, contributing significantly to the overall losses.
In particular, fraud through bank branches experienced an unprecedented escalation. Losses soared from ₦133.9 million in the first quarter to a staggering ₦42.2 billion in the second quarter—a shocking 31,497% increase. Other channels, such as computer/web-based fraud, also saw a substantial rise, with losses jumping from ₦24 million to ₦400.8 million in the same period. However, there was a silver lining, as mobile fraud losses decreased by 59%, dropping from ₦216.4 million to ₦88.7 million.
The FITC report has prompted calls for urgent action to address this growing issue. Experts have emphasized the importance of implementing advanced cybersecurity systems, regular staff training, and stricter regulatory oversight to mitigate risks. Additionally, customer education is seen as crucial to help users identify and avoid common fraud tactics. Collaboration among stakeholders, including law enforcement and financial institutions, is also vital to curb the escalating fraud menace.
This trend not only threatens the financial stability of banks but also erodes public trust in the banking system. As fraudsters continue to exploit technological advancements, the onus lies on the financial sector to stay one step ahead. With billions at stake, Nigerian banks must prioritize security and transparency to safeguard their assets and restore confidence in their operations.
