The significant increase in the reported value of fraud recorded by Banks and Specialized Deposit-Taking Institutions in Ghana in 2020, which stands at GHS1 billion, was a result of a number of factors, including the involvement of staff of these financial institutions.
According to the Bank of Ghana’s new fraud report for the year 2020, 56% of all reported fraud cases involved a staff member.
In total, the year 2020 recorded a marginal increase in reported fraud incidents with a minimal decrease in losses.
A total of 2,670 cases were recorded in 2020, as compared to 2,311 cases in 2019, representing a year-on-year increase of about 15 percent.
Per the Central Bank’s report, recorded data over the years shows a persistent trend of staff involvement in fraud.
The steady rise in this phenomenon generally could be attributed, according to the bank, to the use of poorly remunerated temporary staff, who undergo limited background checks, for sensitive tasks and a lack of corporate governance systems that helps to ensure accountability and fairness and transparency.
John Awuah is the CEO of Ghana Association of Bankers, and he tells Citi Business News, that more can be done to reduce the involvement of staff in cases of fraud.
“As human beings no matter what amount we are remunerated with, if we do not have that element in us that pushes us to be people of integrity, within a matter of two or three months your expenses will catch up, and that salary will not be enough, and you’ll find other ways of making money.”
“My point is I would want us to tackle it more from the governance and also from the training perspective. Most of these fraud incidents have happened because a staff has lost a little bit of focus and then fraudsters have been able to infiltrate our ranks and made away with money,” he added.
Fraud Types
In terms of fraud types that saw significant increases in success rate in 2020, ATM and POS fraud, impersonation and remittance fraud topped the list.
ATM/POS related fraud accounted for 32.2% of total fraud-related loss incurred in 2020 and recorded the highest loss value of GH¢8.19 million in 2020, as compared to GH¢1.26 million recorded in 2019, representing a 548.1% increase in year-on-year terms.
Recommendations
The Bank of Ghana as part of efforts to improve the situation made a number of recommendations, including the adequate vetting of Contract/temporary staff of financial institutions by the Police and Bank of Ghana to help identify staff with questionable characters.
They also stated that in addition to adequate consumer education on cybersecurity for their customers, banks have been asked to strengthen their Know You Customer & Customer Due Diligence as well transaction monitoring systems in order to facilitate the detection of suspicious or abnormal activities on customers’ accounts. But is it enough?
According to cybersecurity analysts e-Crime Bureau, the bank of Ghana, in addition to its recommendations, needs to ensure the efficient enforcement of all laws regulating electronic banking in Ghana in order to fight the menace of fraud. Eric Kwaku Mensah is the acting head of Technical operations at the E-Crime Bureau.
“I must say that with the passing of the cyber security ACT, we already have the Electronic Transactions ACT, the Payment Systems and Services ACT, even the BoG themselves have actually issued out the Cyber and Information security directive. So I would like to appeal that these ACTs and directives are actually enforced so that institutions will be able to protect themselves.”
“Even when it comes to the insider, I know that the AML guidelines issued by the BoG spell out strongly instances where there need to be background checks on staff. We need to take pragmatic steps together to be able to end the fraud that is bedevilling us,” he added.
