The ARB Apex Bank Limited, which serves as a “mini” central financial institution for Rural & Community Banks (RCBs) says the rise in several types of fraud in rural banks is a course for concern.
According to the Bank of Ghana’s Banks & SDI Fraud Report for the 12 months 2020, Banks and rural neighborhood banks recorded the best money suppression associated losses in 2020.
Rural neighborhood banks misplaced GH¢ 1.69 million via money suppression, as towards a complete of GH¢ 539,000 by banks.
In an interview with Citi Business News, the Acting Managing Director of ARB Apex Bank, Alex Kwasi Awuah famous that key steps are being taken to cut back the incidence of fraud in rural and neighborhood banks.
“We currently have internal arrangements to help deal with fraud. In fact when you go to any rural bank they have structures in place to deal with fraud. They have internal auditors who periodically conduct audit exercise in these institutions, unearth some of these fraud issues and then draw the attention of their boards for the necessary steps to be taken.”
“We are fully aware that fraud cases have occurred in some of our banks and when they come to our attention we take action as ARB Apex Bank. We can assure you that going forward, our systems are robust enough such that when any fraud cases occur we are able to identify and deal with them,” he added.
Reported worth of fraud towards Banks & SDIs hits GH¢ 1 billion
The reported worth of fraud recorded by Banks and Specialized Deposit-Taking Institutions in Ghana in 2020 was about GHC 1 billion.
This represents a rise of over 750 p.c when in comparison with the reported worth of fraud recorded in 2019, which stood at about GH¢115 million.
That’s in keeping with the Bank of Ghana’s Banks & SDI Fraud Report for the 12 months 2020.
The emergence of the COVID-19 pandemic in keeping with the fraud report, noticed clients who weren’t used to digital/digital strategies of constructing monetary transactions being compelled to make use of them.
Consequently, some sections of the banking sector had been uncovered to heightened ranges of fraud associated danger, because of the elevated patronage of digital/digital services and products.
Number of fraud circumstances
In whole, the 12 months 2020 recorded a marginal enhance in reported fraud incidents with a minimal lower in losses. A complete case rely of two,670 circumstances was recorded within the 12 months 2020, as in comparison with 2,311cases in 2019, representing a year-on-year enhance of about 15 p.c.
Despite the reported worth of fraud rising to GHC 1 billion Cedis, precise losses incurred because of fraud for 2020 stands at GH¢25.40 million, as in comparison with an estimated lack of GH¢33.44 million in 2019, representing a 24 % lower.
In phrases of the variety of circumstances reported, fraudulent Withdrawals recorded the best price of enhance within the 12 months beneath evaluate. Fraudulent Withdrawals elevated from 16 circumstances in 2019 to 177 circumstances in 2020 representing an increment of 1,006.3%. E-Money Fraud additionally recorded 64 circumstances in 2020, as in comparison with 14 circumstances recorded in 2019, representing a rise of 357.1% in year-on-year phrases. ATM/POS Fraud recorded 168 circumstances in 2020, as in comparison with 110 circumstances recorded in 2019, representing a 52.7% enhance in year-on-year phrases.
ATM/POS fraud tops checklist
Fraud sorts that noticed important will increase in success price in 2020 had been ATM/POS fraud, impersonation and remittance fraud. ATM/POS associated fraud accounted for 32.2% of whole fraud-related loss incurred in 2020 and recorded the best loss worth of GH¢8.19 million in 2020, as in comparison with GH¢1.26 million recorded in 2019, representing a 548.1% enhance in year-on-year phrases.
E-money fraud additionally recorded a major enhance in loss worth. Loss incurred via E-money fraud elevated from roughly GH¢ 0.37 million in 2019 to an estimated GH¢ 1.04 million in 2020, representing a 180.0% proportion enhance.
This upsurge can also be a results of a rise in use of E-Money companies because of the COVID–19 pandemic. Burglary additionally recorded a substantial enhance in reported and loss values for 2020 as in comparison with reported and loss values recorded in 2019.
Burglary recorded a reported worth of roughly GH¢ 1.35 million in 2020, as in comparison with an approximate reported worth of GH¢ 0.70 million in 2019, representing a rise of 97.7% in year-on-year phrases.
Staff involvement
Staff involvement within the fee of fraud additionally skilled a major enhance, particularly suppression of money. 56% of reported fraud circumstances and 93% of reported money suppression circumstances concerned employees of the reporting establishments.
Recommendations
The Bank of Ghana went on to make quite a few suggestions to assist mitigate the incidence of fraud within the nation. These embrace the satisfactory vetting of Contract/short-term employees of monetary establishments by the Police and Bank of Ghana to assist establish employees with questionable characters.
The banking business must also take a important have a look at remuneration of short-term employees in keeping with the report.
In addition to satisfactory client training on cybersecurity for his or her clients banks have been requested to strengthen their Know You Customer & Customer Due Diligence as effectively transaction monitoring programs to be able to facilitate the detection of suspicious or irregular actions on clients’ accounts.
