Reported value of bank fraud for 2020 was GH¢1 billion – BoG

In 2020, the Bank of Ghana (BoG) has said, many routine activities of institutions including financial transactions that usually would have been undertaken in-person were conducted online.

According to the central bank, customers who were not used to digital/electronic methods of making financial transactions were compelled to use them. Consequently, some sections of the banking sector were exposed to heightened levels of fraud related risk, due to the increased patronage of electronic/digital products and services.

The emergence of the COVID-19 pandemic propelled the use of digital/electronic modes of transacting business, leading to a higher exposure to fraud.

The year 2020 recorded a marginal increase in reported fraud incidents with a minimal decrease in losses. The reduction in losses was mainly due to a reduction in the rate of success for most fraud types. A total case count of 2,670 cases were
recorded in the year 2020, as compared to 2,311cases in 2019.

“The Reported value of fraud for 2020 was GH¢1.0 billion, as compared to GH¢115.51million recorded in 2019,” the bank said.

The notable increase in the value reported was as a result of high values recorded in attempted correspondent banking fraud (forgery of SWIFT advice).

Even though the banking sector did not suffer any losses from any of the correspondent banking fraud attempts, it posed a reputational risk to some banks, whose staff were found culpable in two of the three reported incidents.

Losses incurred as a result of fraud for 2020 stands at GH¢25.40 million, as compared to an estimated loss of GH¢33.44 million in 2019, representing a 24% decrease.

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The COVID-19 pandemic resulted in a surge in the use of digital/electronic platforms for financial transactions, considerably. In an effort to contain the spread of the virus, financial institutions encouraged customers to take full advantage of the various digital products and services available, to execute financial transactions. The surge in usage led to an increase in the incidence of
fraud related to digital/electronic products and services and consequently, an increase in losses emanating from products such as E-Money and ATM/Card fraud.

Submission of fraud returns for 2020, recorded a slight improvement. The banks continued to maintain a 100% rate of submissions and the rural and community banking sector recorded a remarkable increase of 75% in the rate of submissions due to dministrative sanctions issued against non-submitting banks in the first half of the year.

The submission rate across the SDIs will improve marginally if reporting institutions are adjusted to exclude the distressed
institutions. The year 2020 recorded 26.4% decrease in the success rate of fraud attempted.

Some fraud types experienced a significant increase in the rate of success, as compared to 2019, whiles others recorded a remarkable decrease in their rate of success, in comparison with 2019. Fraud types such as ATM/POS fraud, impersonation and remittance fraud recorded significant increases in their rate of success for the period under review