Bank employees push fraud cases to GH₵1billion

There is a rising trend of bank staff engaging in crime, pushing fraud cases to more than seven times to hit GH₵1 billion.

Per data provided by the Bank of Ghana (BoG), “the total value of reported cases for 2020 amounted to approximately GH¢1.09 billion, as compared to a reported value of GH₵115.51 million recorded in 2019, representing an increase of 773.6% in value of reported cases.”

Total case counts of 2,670 were recorded in the year 2020, as compared to 2,311 cases in 2019, representing a year-on-year increase of 15.5% in the number of fraudulent returns submitted to the bank.

The most significant fraud types recorded in 2020 concerning the incidence and/or loss to the banking sector, are fraudulent withdrawals, E-money fraud, and automated teller machine and point of sale (ATM/POS) fraud.

The report stated that the notable increase was due to high values recorded in attempted correspondent banking fraud (forgery of SWIFT advice).

Again, the central bank noted that despite the numerous notices of caution sounded out to the banking industry, in almost every fraud report issued since 2017, data recorded over the years showed a persistent trend of staff involvement in fraudulent activities.

According to the bank, the steady rise in staff engagement in fraud cases was because of poor remuneration and lack of corporate governance systems that helps to ensure accountability, fairness and transparency.

The bank pointed out that the poorly remunerated staff undergo limited background checks for sensitive tasks, thereby engaging in such practices.

Fraud success rate

The report indicated that ATM/POS fraud recorded the highest success rate of 97.3% in 2020, in comparison with a recorded success rate of 11.5% in 2019.

Impersonation fraud followed closely with a success rate of 94.7%, as compared to 13.16% in the previous year.

Remittance fraud also recorded a marked increase in the rate of success in 2020. The year also recorded a 64.3% rate of success compared to 32.4% in 2019.

Forgery of documents also recorded a considerable increase in success rate for the period under review.

2020 recorded a success rate of 76.1%, as compared to 11.8% recorded in 2019.

Recommendations

Amid the increasing rate of fraud cases, the central bank has recommended, among other things, that contract/temporary staff of financial institutions should be adequately vetted by the police and BoG to help identify staff with questionable characters.

In addition, the banking industry has been urged to take a critical look at the remuneration of temporary staff and, in collaboration with the recruitment industry, set equitable minimum payment standards for temporary staff assigned to the banking sector.

More so, E-Money issuers must enhance and sanitise their existing know your customer (KYC) database by acquiring authentic and verifiable bio data on all existing mobile account holders.

Banks have been asked to also activate a second level authentication in online transactions, by requesting specific One Time Passwords (OTPs) and PINs.

For consumers, the central bank recommended more education on the safe usage of digital/electronic products and services, as well as encouragement to use efficient electronic payment methods that keep an audit trail of fund movements.

Efforts by the Bank of Ghana to reduce fraud

Meanwhile, the Bank of Ghana has intensified efforts with stakeholders, most of whom are members of the Committee for Co-operation between Law Enforcement Agencies and the Banking Community (COCLAB) to combat fraud.

The Fraud Task Force, led by BoG, has also facilitated collaboration between industry participants and other stakeholders to identify the risks posed by emerging fraud trends.

The Bank of Ghana has also made significant strides by introducing a 24-hour monitoring system to flag irregularities in transactions to reduce cyber fraud in the banking industry.

In addition to this, BoG has issued a Cyber and Information Security Directive known as “Bank of Ghana Cyber and Information Security Directive 2018” to provide the financial sector with a framework for establishing cyber and information security protocols.

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