Dep. Governor urges COCLAB to help address, reverse growing trend of fraud in banking industry
Second Deputy Governor of the Bank of Ghana (BoG), Elsie Addo Awadzi, has called on members of the Committee for Co-Operation between the Law Enforcement Agencies and the Banking Community (COCLAB), to help address the growing cases of fraud within the banking sector.
Delivering a speech at a workshop held for COCLAB, Mrs Addo Awadzi averred COCLAB needs to take a critical look at the new fraud-related developments and identify concrete measures to help address the underlying factors, so as to reverse the trends in recorded fraud cases in the industry.
According to the Second Deputy Governor, the Central Bank’s 2021 Fraud Report highlighted a disturbing prevalence of fraud in the banking sector, as reported by banks and other regulated institutions.
“Disturbing still, is the fact that most of the reported cases of fraud involve staff and contractors of these financial institutions,” she noted.
“Another worrying trend from the 2021 fraud report is the increasing levels of fraud associated with electronic money channels such as ATM fraud, mobile money fraud, and cyber fraud,” she added.
Speaking further at the workshop, the Second Deputy Governor, also urged COCLAB to work together to speed up investigations and prosecutions for financial crimes, that led to the failure and demise of 420 regulated institutions [banks, savings and loans, microfinance firms] in the industry, and as well as brought untold hardships to depositors, former employees, other creditors, and ultimately, tax payers, that had to pay to provide relief for those affected.
Additionally, she tasked the Committee to support the BoG’s efforts to sanitize the forex bureau sector, by strictly enforcing existing rules for the fair and transparent conduct of business by licensed forex bureaus, and by clamping down on illegal forex operations (black market).
“While Bank of Ghana regulates the sector, it relies on criminal investigative and law enforcement agencies (all of which are members of COCLAB) to help with enforcement efforts. We count on your cooperation especially now more than ever to help restore order and fair pricing to promote the Ghana cedi’s stability,” she quipped.
Created in 1988 to help deal with financial crime and recently revived by the BoG, COCLAB draws its membership from the Bank of Ghana, Ghana Association of Banks, the Judiciary, the Ministry of Justice and Attorney General’s Department, the Ministry of Interior, the National Security Coordinator’s Secretariat, Interpol Ghana, the Economic and Organized Crime Office, the Financial Intelligence Centre, the National Investigations Bureau, the Ghana Police Service, Ghana Immigration Service, the Ghana Revenue Authority, the Registrar General’s Department, and the National Communication Authority.
Value of fraud cases surge by 144% despite reduction in number of cases by 12%
The Bank of Ghana has revealed that the number of attempted fraud cases in the banking industry reduced by 12.09% to 2,347 in 2021.
Despite the decline in the number of fraud cases, the value of these cases increased significantly by 144% reaching a total value of GHS 65 million.
This compares to the loss of GHS 25 million recorded in 2020.
Per the report, the significant fraud types that accounted for this figure included Automated Teller Machine (ATM) card and Point of Sale (POS) fraud, impersonation, lending and credit fraud, forgery and manipulation of documents, cash suppression and E-money fraud.
ATM card/POS related fraud recorded the highest loss of GHS 22 million. This can be attributed to negligence of some customers and weak systems of some financial institutions.
Another significant fraud type was impersonation which recorded a loss of GHS 10 million. This loss can be attributed to lack of due diligence on the part of bank staff and customers of financial institutions when carrying out transactions.
The EMI sector reported a significant number of mobile money (MOMO) fraud incidents and loss values in 2021.
EMIs recorded 12,350 MOMO related fraud incidents in 2021. The total value of fraud reported by EMIs for the 2021 amounted to GHS 14.2 million.