Guaranty Trust Holding Company (GTCO) has recorded a significant increase in fraud incidents in 2022 compared to the previous trading year.
According to GTCO’s 2022 financial report, fraud attempts increased by 84.27%, with 27,725 cases reported, while the amounts associated with these fraud cases grew from ₦1.2 billion to ₦6.4 billion.
This is consistent with data from the Nigerian Deposit Insurance Scheme (NDIC), which shows that fraudulent activity recorded by deposit banks in Nigeria rose by 44.8% between 2020 and 2021. Smile Identity, a KYC provider, also reported a 50% increase in fraud attempts between the second half of 2020 and the first half of 2022, with the first half of 2022 recording a 30% increase compared to the same period in 2021.
The prevalence of fraud incidents in Nigerian banks has led to investigations by the Nigerian Data Protection Bureau (NDPB) into Guaranty Trust Bank and Zenith Bank over alleged data breaches. The NDPB’s head of legal enforcement and regulations, Babatunde Bamigboye, stated that the investigations were triggered by allegations of unlawful disclosure of banking records to a third party and unlawful access and processing of personal data. Cybersecurity experts have pointed out that data breaches are often precursors to fraud incidents.
The rise in fraud incidents in Nigerian banks is a concerning trend that needs to be addressed by stakeholders in the banking sector. In response to this, banks need to invest in robust cybersecurity measures to safeguard customers’ data and prevent fraud attempts. Additionally, banks should educate their customers on how to avoid falling prey to fraudsters. The Nigerian government needs to provide regulatory frameworks and guidelines to ensure that banks comply with cybersecurity best practices and protect customers’ data from unauthorized access.
As the threat of fraud in Nigerian banks continues to increase, it is crucial that all stakeholders work together to tackle this menace and ensure that customers’ funds and data are secure.
