Financial sector fraud unacceptable

It has emerged that the level of fraud cases reported within the country’s financial services sector is still rising despite efforts by the Bank of Ghana to get players within the industry to check the practice.

For instance, 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, the report noted, 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 staling revelation was contained in the publication of the annual Fraud Report by the Bank of Ghana (BOG), 2023, which seeks 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, SDIs and PSPs. (Read the full story on the front page).

The Graphic Business finds the development worrying just as it is a disturbing trend because it speaks ill of a sector that is battling to recover fully from the impact of the government’s Domestic Debt Exchange Programme (DDEP).

We believe that considering the value of a financial sector to the development of every economy, there should be no room for such sad events which goes to undermine confidence and trust in such an important sector.

What we believe, should not be lost on us is the fact that the level of financial inclusion in the country is still low despite the use of electronic payments and, therefore, such cases further goes to reduce the confidence people have in the sector.

We also want to remind the players in the sector that the impact of the banking sector reforms, coupled with the DDEP, has seriously affected the confidence people have in the financial sector and, therefore, it behoves them to strictly follow the BoG directives to ensure that they minimise or better still, reverse this worrying trend.

It is increasingly becoming evident that the players in the financial services sector are dropping the ball by focusing more on deposit mobilisation without putting in the necessary measures in a sustained manner to check such fraudulent activities within their institutions.

The Graphic Business is very oblivious to the competition within the sector and what players are doing to win more customers to stay afloat within the environment.

However, it is equally crucial to note that the measures needed to fully secure the deposits of their customers are paramount.

It will be unacceptable in our opinion, for any player within the sector to assume that they will take up the cost when such incidents arise. 

Our strong point is premised on the fact that the more the cost emanating from fraudulent practices within the financial sector rises, the more the institutions find ways to pass on the cost to their customers in a subtle way.

There are countless instances where financial institutions develop lame excuses to raise their charges abysmally at the expense of their customers and this is why we believe that such fraudulent acts within their systems, which gives them reasons to do so, must be checked at all costs to save the customer.

Going through the report, we find that the BoG has introduced new directives that these financial institutions must follow as a way to check the practice.

The Graphic Business expects that the financial sector players will strictly adhere to the directives no matter the extent to which it might create some discomfort or inconvenience for their customers.

To us, there is a need for financial institutions to start a campaign to educate their customers and the public regarding the directives and the reasons adduced so that their customers will bear with them when they execute the directives.

We need a sound, flexible and potent financial sector. Its relevance to the building of our economy should also not be lost on us at any point through complacency or otherwise because without a strong financial sector, there will not be a strong economy.