Zenith Bank’s Fraud Loss Deepens While Peers See Decline
Zenith Bank Plc, Nigeria’s biggest bank by net profit, witnessed a 14-fold surge in fraud-related losses in 2024, while several of its peers saw a sharp slide.
Data compiled by Markets Reporters from earnings reports show that Guaranty Trust Holding Company (GTCO) Plc, Access Holdings Plc, Fidelity Plc and Wema Plc cut their fraud losses.
The amount lost to fraud and forgery incidents by Zenith jumped to N5.26 billion from N383.4 million in 2023, while the combined loss of GTCO, Access, Fidelity and Wema narrowed to N1.84 billion from N9.12 billion.
The United Bank of Africa reported a fraud loss of N1.14 billion last year without providing data for the previous year.
A recent report by FITC, a training institution centre, said deposit money institutions reported the termination of 42 employees due to their involvement in fraudulent activities in the third quarter of 2024.
“This marks a 14.3% increase compared to the previous quarter, where 49 bank staff members were terminated for similar reasons. It is worth noting that investigations are ongoing for 38 staff allegedly involved in fraudulent activities in Q3,” it added.
The organisation noted that fraud-related losses in Nigeria rose to N10.1 billion across 19,007 cases in the third quarter of 2024, up from N1.18 billion across 12,066 cases a year earlier. However, it dropped by more than three-quarters from N42.8 billion in the previous three months.
The rise of digital payments in Africa’s most populous nation has led to an increase in financial transactions, which has been accompanied by a growth in fraud cases within the financial system.
According to the Nigeria Inter-Bank Settlement System, fraud incidents surged 112% between 2019 and 2023, while the value of losses spiked 496% to N17.67 billion ($11.1 million). Computer, mobile, and PoS fraud account for the bulk, driven by increased digital activity and gaps in cybersecurity protocols.
To combat the rising incidence of fraud in the banking industry, FITC recommends leveraging artificial intelligence and machine learning to revolutionize fraud detection by enabling real-time monitoring and predictive analysis of suspicious activities.
“By analysing large volumes of transactional data, these systems can detect irregular patterns and flag potential fraud across multiple channels, including ATMs, POS terminals, mobile, and online platforms,” it said.
Other measures are implementing behaviour biometrics and multi-factor authentication, enhancing data analytics and inter-bank information sharing, strengthening internal controls and employee training and developing a comprehensive customer awareness programme.
