Banks lose N53.4b to frauds in 9 months as attacks rise by 65%

ACTIVITIES of cyber criminals appear to be on the rise as hackers were able to steal about N53.4 billion from banks in nine months.
FITC Fraud and Forgery reports for the first, second and third quarters of 2024 revealed this loss.
According to FITC, while there was a minimal loss of N468.4 million in Q1, in Q2, the hackers stole N42.8 billion and added N10.1 billion in the third quarter. The N53.4 billion was N44 billion higher that what was stolen in 2023, which was N9.4 billion.

The report showed fraud cases reported by Nigerian banks jumped by 65 per cent. In terms of attempt, FITC said attackers attempted to steal N115.9 billion in the third quarter, marking a 105 per cent surge compared with N56.6 billion recorded in Q2.

The FITC report for Q3 is based on returns on fraud and forgery received cases from 30 deposit money institutions. According to the FITC, 81 of such returns were received in the quarter under review.
Further analysis showed that 26 reports were submitted in July, while 27 reports were received in both August and September.

The report showed that Computer/Web fraud, Mobile fraud, and POS-related fraud were the most prevalent types of fraud in the third quarter, following a trend that has persisted since 2023 and continued into the first two quarters of 2024.

In the period under review, multiple channels including ATMs, online platforms like web and mobile banking, bank branches, and POS terminals were adequately explored by the criminals.

Among the instruments used, card-based fraud witnessed a notable increase of 54.2 per cent, rising from 11,237 cases in Q2 to 17,314 in Q3, while cash-related fraud cases, and also rose by 125 per cent, climbing from 228 cases in Q2 to 517 in Q3.

With the attackers becoming more brazen in their acts, the Managing Director and Chief Executive Office of the FITC, Dr Chizor Malize, emphasised the urgent need to tackle the rising cases of fraud as it is currently eroding the trust in the financial system.

“The increasing rate of fraud affects businesses and it is eroding the trust of the financial service sector. All the channels we use for transactions today; web, computer, mobile, and PoS, among others have become targets of fraudsters.”

Malize said that was why the FITC recently brought together key stakeholders to assess the risks and see how the industry could leverage Artificial Intelligence (AI) to address the problem.

According to her, emerging technologies like AI would play a critical role in combating the rise of cyber threats and digital risks, which have been exacerbated by advancements in technology.

“As the Fraud Risk Report underscores, there is an urgent need for leveraging AI to mitigate risks and bolster the stability of the financial system,” she said.

At a rountable organised by FITC on the matter, Nairametrics quoted the Group Chief Information Security Officer of Access Bank, Mrs. Favour Femi-Oyewole, as stressing: “the need for embedded security in the financial sector due to consumers’ exposure to diverse APIs and multiple digital footprints.”

The Access Bank GCISO called for broad-based implementation of machine learning to address the growing financial challenges and avert potential risks.

Emphasising the need for collaboration among banks to tackle the menace, Femi-Oyewole said: “We can compete on models, we can compete on strategies, on objectives and all that. When it comes to cyber security, we are all faced with the same common enemy. So, that means we have to collaborate.”