The Ghana Association of Bankers’ (GAB) analysis of the Bank of Ghana’s (BoG) 2023 fraud report has prompted it to make certain recommendations.
These include adoption of advanced data analytics; implementation of zero-trust security frameworks; and the use of block-chain technology for enhanced transaction transparency.
The proposals come in response to a challenging year for the country’s banking sector, which saw a paradoxical decrease in fraud attempts but an increase in financial losses.
It emphasises the need for a multi-faceted approach to fraud prevention, combining technological solutions with improved human resource practices and customer education…. chief among which is the use of advanced data analytics for fraud detection.
Banks should invest in artificial intelligence and machine learning tools to proactively detect and prevent fraud.
Notably, however, the recommendations extend beyond purely technical solutions. The analysis suggests enhanced staff-vetting and ethical training, as well as improvements in employee welfare.
This human-centric approach acknowledges the potential impact of economic hardship on fraudulent behaviour, with the analysis noting: “Given the challenging economic environment and sharp rise in cost of living over the past two years, financial hardship can significantly influence employee-behaviour and ethical standards”.
These recommendations come against a backdrop of alarming fraud statistics. The report reveals a total of 15,865 fraud cases across the sector in 2023, marking a 4.6 percent increase from the previous year.
In spite of this modest rise in incidents, the financial impact has been substantial – with losses amounting to approximately GH¢88million.
Payment Service Providers (PSPs), which include mobile money and other digital payment platforms, accounted for an overwhelming 92.37 percent of all reported incidents.
This underscores the growing vulnerability of digital financial services; a sector that has seen rapid expansion in recent years.
Despite a 59 percent drop in attempted fraud cases, banks and Specialised Deposit-Taking Institutions (SDIs) saw a 29 percent increase in total loss value – reaching GH¢72million in 2023. This discrepancy points to a troubling increase in the effectiveness of fraudulent activities.
Also, cash theft, particularly through suppression, emerged as a significant concern. Cash Theft (Cash Suppression) accounted for the largest losses, totalling GH¢14.8million – a staggering 14-fold jump from the GH¢1million recorded in 2022, the BoG notes.
Perhaps most concerning is the increased involvement of bank staff in fraudulent activities – a 46 percent surge in fraud cases involving employees in banks and SDIs, rising from 188 in 2022 to 274 in 2023.
This raises serious questions about internal controls and the integrity of financial institution employees.
