A staggering ₦42 billion was lost to fraudulent activities involving point-of-sale (POS), mobile phone, and computer systems in Nigeria between April and June 2024.
This revelation was made in a recent fraud report released by the Financial Institutions Training Centre (FITC).
The report, covering the second quarter of 2024, recorded a total of 11,532 fraud cases.
“Computer/web fraud, mobile fraud, and POS-related fraud were the three most prevalent types, continuing the trend observed throughout 2023 and into the first quarter of 2024,” the FITC report noted.
The total value of fraud during the second quarter stood at ₦56.3 billion, representing a sharp increase from the ₦34.8 billion reported in the first quarter of 2024. Out of the ₦56.3 billion, approximately ₦42.6 billion was lost to fraudsters, while financial institutions were able to recover ₦13.7 billion.
Mobile fraud, which includes incidents related to mobile apps and internet banking, was responsible for 33.4% of all reported fraud cases. POS-related fraud followed closely, contributing 24.6% of the total, while web-based fraud accounted for 16.9%.
Computer-based fraud also featured prominently, highlighting the growing cybercrime threat within Nigeria’s financial industry. Bank branches, however, bore the brunt of the losses, accounting for 95% of the total fraud value, according to the report.
FITC also revealed the ongoing issue of internal fraud, noting a rise in insider threats. During the period under review, 49 bank employees were dismissed due to their involvement in fraudulent activities.
A breakdown of fraud categories by magnitude shows that bank branches suffered the largest financial impact, with losses amounting to ₦54 billion, representing a whopping 95.63% of the total fraud value.
Web-based fraud followed with losses of ₦1.2 billion (2%), while POS and mobile fraud each accounted for about 1%, with losses of ₦651 million and ₦547 million, respectively.
The report also pointed out a significant drop in card-related fraud, which declined by 31.8%, while cheque and cash fraud saw a surge, resulting in substantial financial losses.
The rise in cash-related fraud suggests that criminals continue to exploit traditional financial instruments despite advancements in digital security.
FITC stressed the need for adopting artificial intelligence and other cutting-edge technologies to combat the rising sophistication of fraudsters in Nigeria’s financial sector.
It also emphasized the importance of proactive measures such as upgrading security systems and ensuring continuous staff training to minimize fraud risks.
According to the institute, the financial sector is under increasing pressure, with fraudsters leveraging both modern and traditional methods to exploit banks and other financial institutions across Nigeria.
“The need for stricter regulatory oversight and the adoption of cutting-edge technology remains paramount in safeguarding the financial landscape from future threats,” it stated.
Commercial banks in Nigeria were reported to have lost ₦42.6 billion to fraud and forgeries between April and June 2024 alone.