Editorial : Extra vigilance required to unearth banking fraud

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Even though the country undertook a massive financial sector cleanup recently, there are still snippets of underhand dealings going on in the sector.

The Bank of Ghana (BoG) this week announced that in 2019, the banking industry reported a total number of 2,295 fraud cases as compared to 2,175 fraud cases reported in 2018.

The Bank attributed the marginal increase in the number of fraud cases to improved efforts by the Financial Stability Department to identify, monitor and to ensure compliance with reporting of fraud cases in the industry.

The Banking Industry Fraud Report published by the Bank of Ghana shows that the industry’s reported fraud in 2019 increased by more than 5.5 percent, recording 2,295 cases and valued at GH¢115 million. Approximately GH¢33.4 million representing 28.9 percent of this amount was reported as losses, while 71 percent, i.e., GH¢82 million was unsuccessful or unrecovered.

The central bank has described the situation as alarming, particularly as some of the cases were largely perpetrated by staff of the banks themselves.

“The alarming rate of involvement of bank staff in the perpetration of fraud in the banking sector, calls for significant reforms in the engagement, remuneration and disengagement processes of employees and contractual staff of financial institutions”, the report states.

Also, in recent times, the various forms of advanced technologies adopted by financial institutions have made the banking sector more susceptible to various risks such as phishing, identity theft, card skimming, vishing, email fraud and more sophisticated types of cyber-crime.

Coming in at a time when those affected by the financial sector cleanup are clamouring for their locked up funds, our fear is that the situation creates a sense of insecurity for depositors. It worsens the fear of depositors as to whether their monies are safe with the banks.

It also questions the increasing number of cybercrime which questions the rising use of electronic platforms, pertaining to their safety.

In order to restore confidence in the industry, it is our firm conviction that bank staff that collude to perpetuate fraud and such underhand dealings must be exposed and made to suffer the full rigours of the law so that depositors will be convinced that the banking institution frowns on such activities.

Suppression of cash and deposits accounted for the largest portion (77 percent) of the total number of fraud cases reported to the Bank of Ghana.

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