Ghana Association of Banks Makes 7 Recommendations to Combat Fraud in the Financial Sector
The Ghana Association of Banks (GAB) has put forward a series of strategic recommendations to enhance the banking sector’s resilience against fraud, following a detailed synthesis of the Bank of Ghana’s (BoG) Fraud Report, which covers the period from 2019 to 2023. The proposals are designed to complement existing measures from BoG aimed at addressing the growing sophistication of fraud in the financial sector.
A key focus of GAB’s recommendations is the adoption of advanced data analytics. Banks are being urged to invest in artificial intelligence (AI) and machine learning tools to preemptively detect fraudulent activity. By identifying suspicious patterns in transactions, these technologies could help institutions detect potential fraud before it materializes, shifting the sector from a reactive to a proactive approach to fraud management.
Another recommendation is the implementation of a zero-trust security framework. This model requires continuous verification of all users and devices, whether internal or external, significantly reducing the risk of insider threats. By limiting implicit trust and constantly verifying access, the framework enhances the sector’s cyber defences.
The report also highlights the need for enhanced staff vetting and ethical training. According to GAB, rigorous vetting processes, coupled with regular ethical training and fostering a whistleblower culture, could help mitigate internal fraud risks. The association emphasizes that stronger internal controls, especially regarding staff behavior, are vital in preventing fraud within financial institutions.
Blockchain technology is another area of focus. GAB recommends that banks explore the adoption of blockchain to secure transactions, reduce document forgery, and prevent fraudulent withdrawals. Blockchain’s decentralized ledger system offers greater transparency and reduces opportunities for tampering with transaction records.
Given the increasing frequency of cyber threats, GAB stresses the importance of customer education on cybersecurity. Strengthening awareness campaigns around phishing and digital fraud, particularly in mobile banking and online platforms, could significantly reduce customer vulnerability to scams.
Additionally, staff welfare has emerged as a critical factor in fraud prevention. With the cost of living rising sharply, financial hardship among employees may compromise ethical standards. GAB recommends that banks regularly assess staff well-being and provide adequate support to mitigate internal fraud risks driven by financial pressures.
Lastly, staff lifestyle audits are proposed to identify discrepancies between employees’ financial behavior and their compensation. GAB suggests that monitoring social media activity and investigating suspicious acquisitions could help detect early signs of internal fraud.
These recommendations aim to build a more robust banking system in Ghana by leveraging technology, strengthening internal controls, and enhancing employee well-being, all in a bid to curb the growing threat of fraud.
The Bank of Ghana’s 2023 Fraud Report revealed a 5% increase in fraud cases across the banking sector, with incidents rising from 15,164 in 2022 to 15,865 in 2023.
The financial impact of these cases also escalated, with total losses surging 7% year-on-year to approximately Gh¢88 million. The report highlights significant upticks in fraudulent account withdrawals, cyber and email fraud, and cash suppression.
According to the BoG, while the number of attempted fraud cases in the banking and Specialized Deposit-Taking Institution (SDI) sectors declined by 59%, the associated loss value soared by 29% to Gh¢72 million.
This sharp increase is attributed to high-value foreign currency fraud cases, which, when converted to Ghanaian cedi, inflated the 2023 figures.
The Payment Service Providers (PSP) sector, however, saw contrasting trends. Despite a 20% rise in fraud incidents, the sector recorded a 38% drop in losses, falling from Gh¢26 million in 2022 to Gh¢16 million in 2023.
