The Bank of Ghana has noted a significant rise in fraud incidents throughout the banking industry, specialized deposit-taking institutions (SDIs), and payment service providers (PSPs) in its recently released annual Fraud Report.
The report revealed the evolving fraud typologies observed and emphasized the Bank of Ghana’s commitment to combatting these fraudulent activities to promote the integrity of the country’s banking system.
Throughout 2022, the banking and SDI sectors collectively witnessed 2,998 attempted fraud cases, a significant increase of 27.74% over the 2,347 incidents reported in the prior year.
Despite the increase, the data showed a modestly positive drop in the total loss value, which came in at about GHC 56 million in 2022, down from GHC 61 million in 2021 by 7.88%.
According to BoG’s statement, the most significant fraud drivers affecting institutions among the several fraud typologies that are common in the industry are document forgery and manipulation, fraudulent withdrawals, check fraud, cyber/email fraud, and cash theft (cash suppression).
Of these, BoG in its statement noted that forgery and manipulation of documents emerged as the most prominent fraud typology, accounting for a staggering loss value of GH¢33 million.
Concurrently, fraudulent withdrawals contributed to a loss of GH¢7 million, often involving the complicity of bank and SDI staff. Additionally, cheque fraud resulted in losses totaling GH¢5 million, with the modus operandi frequently involving cloned cheques.
Although employee fraud is still a concern, according to BoG, there has been a discernible decline in recent years. This, it stated, can be attributed to the Bank of Ghana’s imposition of stringent sanctions and increased advocacy for improved controls by sector institutions. In 2022, the number of fraud cases involving staff decreased to 188, from 278 in 2021.
Notably, as disclosed by the statement, cash theft (cash suppression) from customer accounts accounted for the majority of instances listed in this category. This type of fraud is common, especially in the rural and community banking industries.
The PSP sector, which witnessed a surge in the adoption of electronic channels for transactions, also faced its share of attempted fraud and associated losses.
Although there was a marginal decrease of 1% in fraud incidents reported by PSPs in 2022 (12,166 incidents) compared to 2021 (12,350 incidents), the loss values were significantly higher.
The total value of fraud reported by PSPs in 2022 reached GH¢27 million, an increase of 47% compared to GH¢14.2 million in 2021. Furthermore, the report highlighted a staggering 103% increase in E-Money related losses recorded by PSPs, which skyrocketed from GH¢12.8 million in the previous year to approximately GH¢26 million in 2022.
Cumulatively, a total of 15,164 fraud cases with a total loss value of GHS 83m were reported by banks, SDIs and PSPs in 2022.
BoG Outlines Directives To Curb Fraud In The Banking Sector
The Bank of Ghana has given directions to the banking, SDI, and PSP sectors in response to these worrying tendencies.
BoG’S guidelines placed a strong emphasis on the necessity of expanding staff training and awareness programs, strengthening control frameworks, putting in place reliable risk management systems, and encouraging customer education programs.
By proactively putting these safeguards in place, BoG pointed out that the industry may successfully reduce the risk of fraud, increase client confidence, and protect itself from any financial losses brought on by fraudulent activity.
As Ghana’s financial landscape continues to evolve, maintaining the trust and confidence of customers and investors becomes paramount.
The Bank of Ghana’s publishing of its Fraud Report serves as a reminder to industry participants to step up their efforts to combat fraud and safeguard the stability of the banking system.
