Despite the stringent measures adopted by the Bank of Ghana (BoG) to help check the upsurge of fraud within the banking sector, the number of such cases continues to rise.
Data collated from the three sub-sectors -banks, Special Deposit-Taking Institutions (SDIs) and Payment system platforms (PSPs)- indicated that overall, the count of fraud cases increased to 15,865 in 2023 from 15,164 in 2022, reflecting a 5% rise.
These cases corresponded to a total loss value of approximately Gh¢88 million in 2023, as compared to GH¢82 million in 2022, indicating an increase of about 7%.
This revelation was contained in the publication of the annual Fraud Report by the Bank of Ghana (BOG) 2023, which sought to create awareness of fraud occurrences and trends identified within the reporting year, with the view to promote the soundness and integrity of the banking system.
The 2023 report presents fraud typologies observed in relation to services provided by banks, Specialised Deposit-Taking Institutions (SDIs) and Payment Service Providers (PSPs).
Analysis of the 2023 data showed that fraud heightened in fraudulent withdrawals from victims’ accounts, cyber/email fraud and cash theft (cash suppression).
Another area of concern is SIM swap-related fraud, where SIM numbers linked to banking accounts are fraudulently taken over and monies subsequently withdrawn from the accounts.
The BoG report said this form of fraud targets individuals who have banking applications on their mobile phones and have linked their bank accounts to mobile money wallets.
Meanwhile, it said, “While attempted fraud cases in the banking and SDI sectors declined sharply by 59% in 2023 compared to 2022, the total loss value associated with these cases stood at approximately GH¢72 million, a 29% increase over the 2022 figure of GH¢56 million recorded.
The report said the sharp increase in the loss value was influenced by outlier fraud cases involving foreign currencies, which when converted to Cedi, ballooned the 2023 attempted fraud value at loss.
PSP sector
Concerning the PSPs, they revealed that the sector also recorded a loss of GH¢16 million involving 14,655 cases in 2023.
Although the loss value recorded in 2023 represented a 38% decline compared to the GH¢26 million recorded in the previous year, the incidents showed a 20% increase compared to the 12,166 cases in 2022.
Recovery
The report said through the collaborative efforts of stakeholders and the fraud controls put in place by financial institutions, an amount of GH¢95 million was recovered from the total loss of GH¢167 million.
This reduced the overall loss to GH¢72 million for the period under review.
Directives SDIs
In view of the above findings and trends, BoG has directed banks and Special Deposit-Taking Institutions (SDIs) to update their technologies and tools with enhanced built-in security features to curb fraud.
They are equally mandated to prioritise employee training, continued due diligence and strengthening of internal controls.
The central bank further asked banks to strengthen the security protocols for account access and transactions, including multi-factor authentication, as well as regular updates of mobile banking applications with biometric authentication and fix bug issues.
The BoG also entreated banks and SDIs to ensure that mobile applications that allow auto log-ins are deactivated while secure codes are required each time the user opens the application.
It said banks and SDIs should also ensure that Know-Your-Customer procedures during onboarding are strictly adhered to safeguard transaction verification processes.
The central bank further asked banks and SDIs to intensify fraud sensitisation to their customers, adding that they also need to collaborate effectively with law enforcement agencies in the event of staff fraud to ensure stiffer punishments are meted out to those found culpable to serve as deterrents.
BoG steps in
Generally, bank and SDI sectors recorded increases in the loss values as a result of fraud while the PSP sector saw some decline.
The BOG continues to engage institutions with high incidences of fraud to develop action plans to address such incidences in the industry.
The BOG has also strengthened its engagement with relevant stakeholders to enhance collaboration in the fight against cyber-related fraud.
The report has also highlighted some directives by BoG to banks, SDIs and PSPs which, if implemented, will help reduce the incidence of fraud in the sector.
Content by: Charles Benoni Okine
