- ..IT expenditure jumps 9 times
Fraudsters and forgers hit the First City Monument Bank (FCMB) in 10 years to 2024 as losses to the unscrupulous individuals and entities jumped 106 times over the period, according to Economy Post’s analyses of the bank’s decade-long financial statements.
The bank’s losses to fraudsters and forgers persisted despite increasing its information technology (IT) expenditure 9 times over the period.
According to the annual reports, the bank lost just N24 million to fraudsters and forgers in 2014. However, the losses jumped 106 times to N1.408 billion in 2014, representing 5,763 percent increase over the 10-year period.
Deposit money banks are required by the Central Bank of Nigeria (CBN) to report annual, half-yearly or quarterly fraud and forgery losses in their financial statements. It is a practice seen even in other parts of the world. It helps regulators to determine a financial institution’s risk level and enables shareholders to know the status of their banks.
FCMB lost N24 million to fraud and forgery in 2014, N13.246 million in 2015, N16.411 million in 2016, N6,399 million in 2017, and N93.499 million in 2018.
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Similarly, fraudsters and forgers hit again in 2019, stealing N212.263 million from the bank. The financial institution lost N89.856 million to fraudsters and forgers in 2020, N123.083 million in 2021, and N59.035 in 2022.
The fraud numbers of the last two financial years show the menacing attack of fraudsters and forgers on FCMB, with the tier-2 bank losing N828.407 million in 2023 and N1.408 billion in 2024.
IT spend rises 9 times
FCMB was hard hit by fraudsters and forgers in the 10-year period despite its rising expenditure on information technology. As of 2014, FCMB’s spent N2.996 billion on IT, which jumped 9 times to N26.329 billion in 2024. By implication, the amount spent by the financial institution on IT increased by 779 percent in the 10-year period.
Despite these humongous expenditures, fraudsters and forgers still found their way into the bank, stealing depositors’ money over the period.
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In April 2024, Justice S. N. Odili of the Anambra State High Court sitting in Onitsha, Anambra State, convicted and sentenced a former FCMB manager in Onitsha branch, Mr Nwachukwu Placidus, to a cumulative 121 years imprisonment for diverting fixed deposit funds of a customer to the tune of N112.1 million for his personal use, the Economic and Financial Crimes Commission (EFCC) reported.
Fraud in Nigerian banks
According to the Financial Institutions Training Centre (FITC), which develops and strengthens resources for the Nigerian financial sector, there were 11,472 fraud cases in Nigerian banks in the first quarter (Q1) of 2024 as against 12,405 in the fourth quarter (Q4) of 2023, representing 7.52 percent decrease over the period.
About N2.99 billion was involved and mobile fraud accounted for 46.29 percent of the total cases. Computer/ web fraud entries constituted 17 percent of all the fraud cases.
The FITC’s Q1 and Q2 of 2024 reports, however, showed that Nigerian banks lost N42.33bn in fraud-related losses over the first two quarters of 2024, with increases observed across multiple payment channels.
The FITC revealed that amount lost to fraud in banks increased 31 percent in Q2 of 2024, reaching N42.2 billion, from N133.9 million in Q1 of the year. The FITC report further disclosed that the number of cases involving bank staff rose from 47 in Q1 to 58 in Q2, leading to the termination of jobs of 49 employees during the period. This represents a 40 percent jump from 35 terminations in Q1 of 2024.
The FITC urged banks to adopting cutting-edge technologies such as artificial intelligence (AI) monitoring systems to detect anomalies in real time.
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FCMB’s measures
Amid the challenges of fraud and forgery facing FCMB and other financial institutions, the bank regularly educates customers on issues relating to fraud and forgery. The bank posted on its website recently:”This is to alert you of the circulation of scam emails by fraudsters, requesting customers to update their Account information by clicking on a supposed ‘FCMB LINK’ webpage link or replying to the email. The web page then requests Customers to provide sensitive information about their accounts, Passwords, ATM Card Details & Personal Identification Number (PIN).”
It asked customers who have visited such sites in the past to change their PINs immediately “or call our Contact Centre Number (07003290000) or send an Email to [email protected] if unclear of the necessary steps to take.”
