Between 2016 and 2017, fraud cases in the banking sector increased by 41.66 per cent from 1,002 cases in 2016 to 1,418 cases in 2017, the Bank of Ghana (BoG) has disclosed.

The total value reported for fraud or attempted fraud, according to the BoG amounted approximately to GH¢190.4 million.

Of the total value, GH¢160.30 million, representing 84 per cent, was recovered while GH¢30.1 million, amounting to 16 per cent, are reported as a loss.
These were contained in the BoG’s 2017 State of Banking Sector Fraud Report and disclosed at a Financial Crime Sensitisation Programme for stakeholders in the banking industry at Ada last week.

The report confirmed fears that Ghana’s banking sector was highly exposed to different fraud types such as cyber fraud, suppression of cash and deposits, forgery of documents and alteration of accounts.

Head of Financial Stability at the BoG, Dr Joseph France told this paper “the criminals are using the banking sector to facilitate fraudulent activities such as money laundering; I must say that the bad guys are on rampage probably because there are some loose ends.”

Advisor of the BoG, Mrs Grace Akrofi noted that as the use of technology in the banking sector advanced, attempts to defraud the banking system had also increased significantly.
She said the reported cases of fraud types such as card cloning, phishing, vishing or ransomware attacks were an indication that fraudsters were getting more sophisticated with the advancement of technology.

According to her, a research conducted in November 2016 by the African Union Commission, in partnership with Symantec, an IT firm, found that Ghana was among the top 10 most-attacked countries in Africa.
Mrs Akrofi said the study disclosed that more than 400,000 malware incidents, 44 million spam incidents and 280,000 bots incidents were recorded in Ghana.

She, therefore, called on industry players to be conscious of security lapses instigated by technology.
“The Bank of Ghana, in response to these lapses, has recently instituted a Cyber Security Committee which has been mandated to implement the bank’s cyber and information security directive.

Report

Mrs Barbara Poku of the BoG said of the 235 registered financial institutions, made up of non-bank financial institutions (NBFIS), rural and community banks and commercial banks, only 58 reported fraud cases.
She noted that the distribution of reported fraud for 2017 indicated that 51.13 per cent of fraud incidents were reported by the NBFIS, while 33.15 per cent and 15.72 per cent were reported by the commercial banks and rural and community banks, respectively.

Cyber fraud soaring

The report indicated that fraud cases relating to cybercrime had the highest value of attempted fraud, amounting to GH¢110,865,960, with less than one per cent resulting in a loss.
She explained that cybercrime involved unauthorised access to the banking system of financial institutions by external parties, email fraud and crime perpetrated through internet banking and other localised payment and mobile banking platforms.

According to Mrs Poku, the incidence of increased cyber fraud was as a result of a poor cyber security environment, an active presence of fraud syndicates in the banks and telcos, as well as poor controls on the protection of banking data.