Banks, SDIs and PSPs report over 15,000 fraud cases with total loss value of GHS 83m in 2022
In its recently released annual Fraud Report, the Bank of Ghana has highlighted a concerning surge in fraud cases across the banking sector, specialized deposit-taking institutions (SDIs), and payment service providers (PSPs). The report revealed the evolving fraud typologies observed and emphasizes 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, marking a substantial 27.74% increase compared to the previous year’s 2,347 cases. Despite this surge, the report reveals a somewhat encouraging decrease in the total loss value, which amounted to approximately GH¢56 million in 2022, down by 7.88% from GH¢61 million in 2021.
Among the various fraud typologies prevalent in the sector, the most notable drivers affecting institutions were the forgery and manipulation of documents, fraudulent withdrawals, cheque fraud, cyber/email fraud, and cash theft (cash suppression). Of these, the 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.
While staff involvement in fraud remains an ongoing concern, there has been a noticeable downward trend in recent years. This 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, down from 278 in 2021. Notably, the majority of incidents recorded in this category pertained to cash theft (cash suppression) from customers’ accounts, a prevalent fraud typology, particularly within the rural and community banking sector.
The PSP sector, which has 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 highlights 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.
In response to these concerning trends, the Bank of Ghana has issued directives to the banking, SDI, and PSP sectors. These directives emphasize the importance of strengthening controls, enhancing staff training and awareness programs, implementing robust risk management frameworks, and promoting customer education initiatives. By proactively implementing these measures, the sector can effectively mitigate fraud risks, enhance customer trust, and safeguard against potential financial losses resulting from fraudulent activities.
The release of the Bank of Ghana’s Fraud Report serves as a wake-up call for industry stakeholders to intensify their efforts in combating fraud and protecting the integrity of the banking system. With an increasing reliance on digital transactions and evolving fraud techniques, it is imperative that institutions prioritize the implementation of robust security measures and foster a culture of vigilance among both employees and customers.
As Ghana’s financial landscape continues to evolve, maintaining the trust and confidence of customers and investors becomes paramount. The proactive adoption of the Bank of Ghana’s directives, coupled with continuous collaboration between regulatory bodies and industry players, will play a pivotal role in fortifying the nation’s banking system against fraudulent activities.
