Banks fraud hits GH¢88m

Value lost due to fraud in the banking sector has shot up to GH¢88 million in 2023 compared to GH¢82 million recorded in 2022, indicating an increase of about seven per cent.

This is according to the ‘2023 Banks, Specialised Deposit-Taking Institutions (SDIs) and Payment Service Providers (PSP) Fraud Report’ released by the Bank of Ghana.

Data collated from the three sub-sectors (Banks, SDIs and PSPs) indicated that overall, the count of fraud cases increased to 15,865 in 2023 from 15,164 in 2022, reflecting a five per cent rise.

The number of staff involved in fraudulent activities in Banks and SDIs rose from 188 in 2022 to 274 in 2023, representing an increase of 46 per cent.

The top five fraud types recorded in 2023 in terms of loss value are cash theft (cash suppression), cyber/email fraud, fraudulent withdrawals from accounts, forgery and manipulation of documents and cheque fraud.

Cash theft emerged as the topmost fraud within the banking space as it recorded a loss value of GH¢14.8 million in 2023 as compared to GH¢1 million in 2022. 

The spike is because of recorded cases of cash theft in foreign currency and movements in foreign exchange during the reporting year. 

This was closely followed by cyber/email fraud with a loss of GH¢10.5 million. Fraudulent withdrawals from accounts recorded a loss value of GH¢8.4 million.

Forgery and manipulation of documents recorded a loss value of GH¢6.9 million in 2023, although it represented a steep 78 per cent decline from the GH¢32 million recorded in 2022. The last of the top five, which is cheque fraud, recorded a loss value of GH¢6.1 million.  

Analysis of the 2023 data showed that fraud heightened in fraudulent withdrawals from victims’ accounts, cyber/email fraud, and cash theft (cash suppression). 

Cash suppression, which has been a fraud-prone area, saw a significant decline from 1,597 cases recorded in 2022 to 156 cases in 2023, indicating a 90 per cent reduction. 

Most of the cases reported emanated from the Rural and Community Banking (RCBs) sub-sector.

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swap-related fraud, where SIM numbers linked to banking accounts are fraudulently taken over and monies subsequently withdrawn from the accounts.

This form of fraud targets individuals who have banking applications on their mobile phones and have linked their bank accounts to mobile money wallets.

While attempted fraud cases in the banking and SDI sectors declined sharply by 59 per cent in 2023 compared to 2022, the total loss value associated with these cases stood at approximately GH¢72 million, a 29 per cent increase over the 2022 figure of GH¢56 million recorded. 

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.

The PSP 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 per cent decline compared to the GH¢26 million recorded in the previous year, the incidents showed a 20 per cent increase compared to the 12,166 cases in 2022.

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.

For fraud involving foreign currencies, the total loss value recorded in 2023 stood at USD 1.7 million and GPB 0.048 million. These fraudulent activities in foreign currencies had a huge impact on the total loss value in Ghana Cedi terms.

E-money fraud also emerged as part of the topmost fraud in this sub-sector. The year 2023 recorded a loss value of GH¢1.4 million as compared to GH¢ 800 in 2022, indicating a significant increase in E-money fraud.

To combat this growing threat, the Bank of Ghana has issued directives aimed at enhancing controls and security measures.

Banks, SDIs and PSPs must now prioritise fraud prevention, investing in cutting-edge technology and staff training.

As Ghana's banking sector navigates this challenging landscape, stakeholders must collaborate to strengthen defences and restore public trust.