Nigerian Banks Sack 49 Employees, See Details

Nigerian Banks Dismiss 49 Employees Over Fraud in Q2 2024.

Nigerian deposit money banks dismissed 49 employees for their involvement in fraudulent activities between April and June 2024, reflecting a concerning rise in internal fraud within the banking sector. The latest report by the Financial Institutions Training Centre (FITC) highlights the increasing trend of insider participation in fraudulent schemes, leading to substantial financial losses for the banking industry.

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Key Findings from FITC’s Q2 2024 Report:

1. Employee Dismissals and Fraud Involvement:
   • In Q2 2024, a total of 49 employees were terminated due to fraud-related activities, representing a 40% increase compared to the 35 employees dismissed in Q1 2024.
   • The report identified 58 employees involved in fraud across 11,532 cases. This marks a 23% rise from the 47 employees implicated in fraud cases during Q1 2024.
2. Types of Fraud and Losses:
   • Fraud cases involving miscellaneous and other fraud types accounted for 96.46% of the total losses, amounting to ₦41.14 billion.
   • Fraudulent withdrawals and web/computer-based fraud were other significant sources of loss, costing Nigerian banks approximately ₦781.2 million and ₦400.7 million, respectively.
   • Total losses in Q2 reached ₦42.6 billion, a sharp increase of over 9000% compared to the ₦468.4 million recorded in Q1 2024.
3. Outsider and Insider Fraud:
   • Cases involving outsiders also surged by 5.20%, from 10,397 in Q1 to 10,938 in Q2 2024. This underscores the multifaceted nature of fraudulent activities targeting the banking system.
   • Insider fraud remains a pressing issue, with many employees gaining unauthorized access to sensitive settlement files.

Recommendations for Banks:

FITC recommended that banks should take several critical steps to curb the rising incidence of fraud, particularly insider involvement. Key suggestions include:

• Strengthening access controls by limiting sensitive data access to a small, vetted group of personnel and implementing multi-factor authentication (MFA).
• Enhanced employee training to help staff identify modern fraud tactics and warning signs, especially in fast-growing areas like card-related and web-based fraud.

Increasing Trend of Fraud in Nigerian Banks:

This worrying trend of financial crime comes at a time when Nigerian banks are grappling with rising external threats and internal weaknesses. The amount lost in Q2 2024 alone surpasses the entire loss recorded for 2023, which stood at ₦9.4 billion. The surge in fraud incidents calls for urgent reforms in the sector to improve fraud detection and prevention capabilities.

What You Should Know:

FITC’s report is based on returns from 28 deposit money institutions, with 80 fraud and forgery reports submitted during Q2. This data highlights the growing need for Nigerian banks to invest in advanced technology and robust security systems to combat fraud.

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