Banking fraud cases hit ¢1bn in 2020 – BoG

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    The Total Value of reported fraud cases in the banking industry witnessed substantial increase last year to hit ¢1.0 billion, data from the Bank of Ghana has revealed.

    This is compared to ¢115.51million recorded in 2019.

    According to the Central Bank, the notable increase in the value reported was as a result of high values recorded in attempted correspondent banking fraud (forgery of SWIFT advice).

    Even though the banking sector did not suffer any losses from any of the correspondent banking fraud attempts, the report said it posed a reputational risk to some banks, whose staff were found culpable in two of the three reported incidents.

    However, losses incurred as a result of fraud for 2020 stood at ¢25.40 million, as compared to an estimated loss of ¢33.44 million in 2019, representing a 24.0% decrease.

    Also, submission of fraud returns for 2020, recorded a slight improvement. The report said the banks continued to maintain a 100% rate of submissions, whilst the rural and community banking sector recorded a remarkable increase of 75% in the rate of submissions due to administrative sanctions issued against non-submitting banks in the first half of the year.

    Again, the report pointed out that submission rate across the Specialised Deposit-Taking institutions will improve marginally if reporting institutions are adjusted to exclude the distressed institutions.

    The year 2020 however recorded 26.4% decrease in the success rate of fraud attempted.

    Some fraud types experienced a significant increase in the rate of success, as compared to 2019, whiles others recorded a remarkable decrease in their rate of success, in comparison with 2019. Fraud types such as ATM/POS fraud, impersonation and remittance fraud recorded significant increases in their rate of success for the period under review.

    Staff involvement

    The staff involvement in the commission of fraud also experienced a significant increase, especially suppression of cash.

    56% of reported fraud cases and 93% of reported cash suppression cases involved staff of the reporting institutions [banks and SDIs].

    Also, data recorded over the years shows a persistent trend of staff involvement in fraud.

    Despite the numerous notices of caution sounded out to the banking industry, in almost every fraud report issued since 2017, the phenomenon continues to increase.

    The steady rise in this phenomenon, the report, said generally could be attributed to the use of poorly remunerated temporary staff, who undergo limited background checks, for sensitive tasks and a lack of corporate governance systems that helps to ensure accountability and fairness and transparency.

    E-Money fraud is also beginning to show a steady rise in the count of reported incidents. E-Money related loss accounted for 4.1% of the total fraud related loss incurred in 2020, as compared to a rate of 1.1% recorded in 2019. The proportion of E-Money related fraud incidents reported rose from 0.6% in 2019 to 4.7% in 2020.

    Recommendations to address fraud

    Key recommendations by the Bank of Ghana  to help fight current fraud trends include consumer education on the safe usage of digital/electronic products, the improvement of KYC information gathered by mobile money operators (MMOs), and the acquisition of transaction monitoring systems by MMOs to help monitor suspicious transactions.