Fidelity Bank sees 3,079 fraud incidents, faces 65 cases in court

FIDELITY Bank faced 3,079 fraud incidents in the 2023 financial year. The lender also had 65 litigations in various courts of the land in 2023, according to the bank’s full-year financial statement for the year ended December 31, 2023.

The number of fraud incidents reported by the end of 2023 represents a 22.28 percent growth from 2,518 fraud incidents reported at the corresponding period of 2022. This means that fraudsters are on the prowl of the Tier-2 bank, which requires extreme care and caution by the financial institution.

Fraud losses by customers

A lot of money was involved in these fraud incidents. In naira, N3.83 billion belonging to Fidelity Bank customers was involved in the fraud incidents in 2023 as against N1.008 billion reported in the corresponding period of 2022.

READ ALSO: Wema Bank incurs N8bn in court cases, loses N239m to fraudsters

In US dollars, about $15,707 was involved in the fraud incidents in 2023 as against $8,554 posted in the corresponding period of 2022.

Litigations rising

Fidelity Bank is also facing rising court cases. As at December 2023, the bank had 65 court cases as against 58 cases in the same period of 2022. The bank also had 7 cases as a plaintiff as against 15 matters in the corresponding period of 2022.

The Tier-2 bank could lose N11.74 billion from the 65 cases, though the directors of the financial institution do not think so.

“Based on the advice of the Bank’s legal team and the case facts, the management of the Bank estimates a potential loss of N1.886 billion (31 Dec 2022: N883 million) upon conclusion of the cases,” the bank said.

Fraudsters on banks’ prowl

Fraudsters are lurking around Nigerian banks. Access Bank lost N5.46 billion to fraudsters and forgers in the first six months of 2023. This represented 355 percent increase from N1.2 billion lost to fraudsters and forgers in the corresponding period of 2022, Economy Post reported.

READ ALSO: Access Bank could lose N28bn, $183m to customers as fraudsters hit again

In fact, fraudsters hit Access Bank again in the second half of 2023, after stealing N5.46 billion in the first half of 2023, according to Economy Post report.

Wema Bank incurred N8.067 billion in court cases as at September 2023 and also lost N239.920 million to fraud and burglary in the nine-month to September 2023, Economy Post reported.

The Tier-2 bank lost N256.387 million to fraud and forgeries in the whole of 2023. However, this was far lower than N880.154 million lost by the bank in fraud and burglary cases in the corresponding period of 2022.

Banks in Nigeria lost a total of N5.79 billion to fraud and forgeries in the second quarter of 2023, according to a firm named FITC.

Fraud rising in Nigeria

Cases of fraud and forgeries are rising in Africa’s most populous nation.

READ ALSO: Wema Bank fined N61.4m after breaching 7 Nigerian laws

A recent study by Surfshark, an Amsterdam-based cybersecurity firm, showed that Nigeria was the 32nd most breached nation in the first quarter of 2023, as reported by Techcabal.

The report noted that Nigeria recorded 82,000 leaked accounts between January and March 2023, representing a 64 percent jump from the result of the previous quarter.

A US Federal Bureau of Investigation (FBI) 2020 report had ranked Nigeria as the 16th nation most affected by internet crimes. The report said Nigeria received 443 complaints relating to internet crimes in 2020, The Cable reported.

Strengthen your IT systems, experts advise

Financial and IT experts have advised banks to improve their systems to beat fraudsters,

“To successfully combat fraud, banks must beat cybercriminals at their own game, which requires making advanced technology part of their first line of defense,” said Hitach Solutions, a global Microsoft integrator, while advising banks to use artificial intelligence, biometric authentication, multi-factor authentication, and advanced analystics.

It also counselled banks to monitor transactions in real time, create database of known threats, educate banking customers, while hosting regular awareness training for the staff members.

READ ALSO: Again, managers take loans from Zenith Bank at 4% interest despite rising benchmark rate

A Lagos-based IT expert, Mr Tobe Iloani, stressed the need to develop several layers of IT security.

“There is a need for banks to use the multi-level approach. The use of AI is most critical now because fraudsters are innovating. Banks across the world use machine learning, and Nigerian banks can adopt this approach.”

A former bank worker in Abuja, Ms Patience Gyan, said there was a need to change the staff in the IT departments regularly.

“Non-IT related frauds also happen. People steal others’ pin numbers or even smartly take their money while in the banking hall. So, this calls for vigilance among Nigerians. Do not believe every story you hear in the streets. Fraudsters are preying on people’s compassion and we should not give them that opportunity,” she added.

Stella Odiche
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