Banks urged to tighten controls to combat fraud

In order to address the incidence of electronic fraud in Nigeria’s banking sector, financial institutions have been advised to tighten their control and risk management systems.

H. Pierson Associates, a consulting firm with specialisation in risk management, advisory and talent management consulting gave the advice in a recent report.


The Central Bank of Nigeria (CBN) recently revealed that commercial banks in the country lost a total of N12.06 billion to fraud and forgeries in the first six months of 2018.


The CBN stated this in its ‘Draft 2018 Half Year Economic Report’.


According to the report, there were 20,768 reported cases of fraud and forgery (attempted and successful), valued at N19.77 billion in the review period, compared with 16,762 cases, involving N5.52 billion and US$ 0.12 million in the corresponding period of 2017.

The report stated that the actual loss by banks to fraud and forgery, however, amounted to N12.06 billion, compared with the N0.78 billion and US$0.03 million, suffered in the first half of 2017.

The reported fraud and forgery incidences were said to have been perpetrated by both bank staff and non-bank culprits.

The cases involved armed robbery attacks, fraudulent ATM withdrawals, draft defalcation, illegal funds transfers, pilfering of cash, stealing, suppression and conversion of customers’ deposits.

H. Pierson Associates, in its reaction to the report, stressed the need for improved corporate governance in institutions.

Furthermore, the consulting firm advised that staff quality control at recruitment and other soft considerations such as ethics, character, competence, among others, should be properly evaluated at the point of recruitment.

In addition, the firm stated that banks must intensify fraud awareness and education by ensuring that their staff and customers are always abreast with cyber-security issues.


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