The Economic and Financial Crimes Commission last Wednesday said most frauds in the banking sector were perpetrated by insider Information, Communication Technology employees.
Head, Cybercrime Section of the EFCC, Abbah Sambo, made the declaration at a national seminar on Banking and Allied Matters for judges in Abuja.
Sambo represented the EFCC chairman, Abdulrasheed Bawa, at the seminar.
He said that most banking sector fraud handled by the commission showed that bank employees aided the acts.
The trust that customers had hitherto reposed in bank officials appears to be shaky following the infiltration of the system by criminal elements that are bent on fleecing people and institutions of huge deposits.
In all, the Nigerian banking industry was reported to have lost about N3 billion to cybercrime and forgeries in the last five years.
The banks lost N2.19bn in 2016 to cyber-crime and forgeries; N2.37 billion in 2017; N15.15 billion in 2018; N5.46 billion in 2019, and N5 billion between January and September 2020.
The Central Bank of Nigeria said the cases involved armed robbery attacks, fraudulent Automated Teller Machine withdrawals, defalcation, illegal funds transfer, pilfering of cash, stealing, suppression and conversion of customers’ deposits.
Also, in some cases, bank workers were found to have connived with criminals to rob or defraud their financial institutions.
Despite the fact that commercial banks invest in their services to ensure that their technical systems are protected and secure, cases of fraud still persist.
The growth in mobile payment transactions in recent years has been consistent with the growth in mobile fraud attempts.
In spite of technological advancements in the security of mobile and digital financial channels, mobile payments have not been immune to intrusion by hackers and identity thieves.
It has been disclosed that identity thefts, such as SIM swap fraud, have been used to perpetrate bank fraud.
In Nigeria, experience has shown that stolen information is obtained through social engineering techniques, as well as by connivance of unscrupulous staff of telecommunication companies with bank workers.
“The banks must go back to the basics. They have to train their staff and retrain them. Unless they return to building careers, it is going to be a difficult task sanitising the system”
Women are also not left out of the scams that are going on in the banks.
Recently, the EFCC arrested a Lagos female banker, Elizabeth, for an alleged fraudulent diversion of funds to the tune of over N34 million.
The suspect, who was arrested on Friday, April 29, 2021, allegedly sent a fraudulent request sometime in January to the Branch Service Manager of Access Bank, Adeola Odeku, Lagos State, to issue a draft in the sum of N31,330,165 in favour of one Best Timland Nigeria Limited.
Investigations revealed that the suspect allegedly forged a solicitor’s letter dated January 19, 2021 directing the bank to issue the draft in favour of Best Timland, claiming that the request was for the payment of rent to the landlord of one of the bank’s branches in Akwa-Ibom State.
In July 2021, the Lagos Zonal Office of the EFCC also arrested three bankers over an alleged case of conspiracy, stealing, forgery and obtaining money by false pretense.
The suspects, who were employees of a new generation bank, allegedly conspired and defrauded a customer of the bank of N51.9 million.
The trio allegedly forged the signature and National Identification Number of the customer, activated his mobile banking application and fraudulently withdrew the money.
There was the report of a banker and his relations involved in fraud and his mother-in-law who were convicted and sentenced to 60 years imprisonment.
As movement from cash to electronic payment is increasing and mobile devices are becoming preferred tools for making payments, there is a need to prepare collectively, confront and fight against the attendant fraud threats that are coming along with this convenient cost-effective and speedy method of payment.
It must be appreciated that fighting mobile fraud requires concerted efforts from all angles, the customers, users, the payment service providers, agencies, banks, mobile money operators, mobile network operators and the regulators, as well as the law enforcement agencies.
It is quite disheartening that despite the progress made by banks, the organisational structure of fraud groups had emerged.
The banking industry in Nigeria has come a long way, in terms of developing techniques to prevent electronic frauds, such as transactions monitoring and the introduction of chip and pin.
Despite this progress made by banks, the organisational structures of fraud groups had evolved from a cluster of localised groups to global crime networks leveraging the internet to share information, update their skills and develop and update their fraud facilitating tools.
This has fueled a multi-billion global electronic fraud network where information, hardware and application said to facilitate fraud are traded and exchanged.
Nonetheless, the banks should be blamed for the incessant fraud in the industry.
The banks are the cause of their own problems. Instead of having trained core staff who would want to build their careers, they, most times, employ people on a contract basis. Those people know they have no future in that bank and what they would do is to start pilfering and doing all sorts of unscrupulous things.
The banks should know that once the banking halls are populated with people who are not core bankers, people who are not specifically trained for or interested in any career in the system, stealing of depositors’ money, will continue.
The rising incidents of fraud in the banking sector could however have a devastating effect on the confidence of customers, the banks and the economy, which would in turn affect the strength of the banks.
The banks will also continue to suffer serious hemorrhages until they are able to change their structure.
The digital revolution has caused a lot of hemorrhage to depositors. The banks must go back to the basics. They have to train their staff and retrain them. Unless they return to building careers, it is going to be a difficult task sanitising the system.
