Editorial: Increasing fraud cases in financial sector disconcerting

In spite of a 59 percent decline in attempted fraud cases within the banks and Specialised Deposit Taking Institutions (SDI) sector in 2023, the total loss value surged to approximately GH¢72 million – indicating a 29 percent increase over the GH¢56million recorded in 2022.

Across the two sectors, total value of fraud cases reported in 2023 amounted to GH¢167million; however, GH¢95million was recovered – resulting in a GH¢72million loss value for 2023.

The 2023 Fraud Report released by BoG offers a comprehensive analysis of fraud trends across Banks, Specialised Deposit-Taking Institutions (SDIs) and Payment Service Providers (PSPs).

It asserts that incidents responsible for the rise in fraud losses were largely due to outlier fraud cases involving foreign currencies, which when converted to cedis significantly inflated the 2023 loss figures.

Meanwhile, the total fraud-related loss for banks only in 2023, as indicated in the fraud report, amounted to approximately GH¢63million – a 21 percent increase from the GH¢52million reported in 2022.

This represents a 17 percent decrease from the 1,163 cases recorded in 2022.

Analysing the rise in total loss value amid fewer attempted fraud cases, the Ghana Association of Banks  said the issue “points to the increasing sophistication of fraud types, particularly foreign currency fraud” – adding that the decrease in reported cases also “underscores a shifting risk dynamic in the country’s financial ecosystem”.

Given these statistics, GAB says they highlight an urgent need for enhanced security measures and vigilance across the sector.

According to the association, fraudulent activities in the banking sector show the evolving nature of fraud and its financial impact. Also, it suggests a potential erosion of public trust in the banking sector.

Consequently, GAB in its data highlighted BoG’s directives to the sectors as a response to findings and trends in the fraud report – banks and SDIs should update their technologies and tools with enhanced built-in security features to curb fraud; intensify fraud sensitisation to their customers; and strengthen the security protocols for account access and transactions among others.

Meanwhile, CEO-Ghana Association of Bankers, John Awuah called for monitoring staff’s lifestyle changes to detect any signs of fraud or illicit income sources.

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