Why Does Fraud Exist Especiallya In Banking?

Fraud is a network. It is a couple. It takes two parties. One person cannot collaborate. A person is too few to commit fraud. Look at Enron. By collaborating with external parties such as its auditing firm, Enron recorded transactions incorrectly. Enron was an energy trading and utility company.
Based in Houston, Texas, Enron would not have succeeded if it had no outside collaboration. For instance, Enron’s executives employed accounting practices that falsely inflated the company’s revenues. Enron inaccurately depicted many contracts or relationships with customers.

On The One Hand
About N3.62 billion in fraud was committed through ATMs, PoS, mobile and other electronic channels and cash in the third quarter of 2022. Financial Institution Training Centre (The FITC), in its report on Frauds and Forgeries in Nigerian Banks in quarter three of 2022 shows that “bank workers carried out all cash theft cases reported within the period.”
FITC reported that outsider involvement in fraud increased. It surged from 14,243 cases in quarter three of 2021 to 16,125 cases in 2022. Fraud committed by bank staff jumped from 32 cases during this period to 112 in quarter three of 2022. As a deterrent, the banks sacked 14 employees. In 2021, 20 staff got the boot.
FITC further shows 22 fraud cases. It involved four bank tellers. Five outsiders. The fraud resulted in a loss of N83.5 million. The report showed 36 cases of forged cheques and signatures. It involved four bank staff, 12 outsiders, and a loss of N305.4 million.
According to the report, 8830 web fraud cases occurred. It involved six bankers and 8,911 outsiders. Over N305 million was lost.
On another level, there were 6,631 mobile frauds. Thirty-three bank workers were involved and 5,194 outsiders. They stole over N2 billion. In terms of cash theft, 16 cases came up involving 16 bank employees and an N569.6 million loss.
FITC was established in 1981 as a Limited by Guarantee not-for-profit professional services organisation. Its institutional members comprise the Banker’s Committee, CBN, Nigeria Deposit Insurance Corporation and all licensed banks.
In the 18-page report, FITC reported 19,314 cases in the first quarter. However, in 2021, about 20,195 came up. The organisation said despite the overall decline in fraud incidences, the amount involved and the amount lost, it is necessary for banks to improve internal control measures to prevent fraud activities.
There is a need to review fraud control measures in the physical bank branches, it advises the banks, as there was a sustained increase in the amount involved in fraud activities and an increase in the amount lost in the bank branches.
To reduce fraudulent activities within the bank branches, all fraud control touch points need to be reviewed and loopholes identified. “Efforts must be made to close the gaps to avoid future occurrences. As always, banks should continue the ongoing sensitisation of their customers on the need to protect their details across various channels and banking platforms,” it announced.
On The Other Hand
According to salaryexplorer.com, Bank Teller Average Salary in Nigeria 2023 – The Complete Guide, a bank teller in Nigeria typically earns about N121,000 a month.
“Salaries range from N65,200 (lowest) to N182,000 (highest). This is the average monthly salary. It includes housing, transport and other benefits. Bank teller salaries vary drastically based on experience, skills, gender, or location,” the website reported.
In The Short Term
Why does fraud exist especially in banking?
Is there a link between bank fraud and the salary of a teller?
When your salary is low, and physical cash winks at you daily, what do you do?
You wink back.