According to the Bank of Ghana (BoG), by 2020, many regular institutional operations, including financial transactions, that would normally have been carried out in person, were being carried out online.
Customers who were not accustomed to using digital/electronic means of conducting financial transactions were forced to utilize them, according to the central bank. As a result of the increasing consumption of electronic/digital goods and services, certain segments of the banking industry were exposed to higher levels of fraud risk.
The development of the COVID19 epidemic accelerated the adoption of digital/electronic means of conducting business, increasing the risk of fraud.
In the year 2020, there was a slight rise in reported fraud occurrences with a slight reduction in losses. The decrease in losses was mostly attributable to a decrease in the rate of success for the majority of fraud categories. There were a total of 2,670 cases recorded in the year 2020, as compared to 2,311cases in 2019.
“The reported value of fraud in 2020 was GH1.0 billion, compared to GH115.51 million in 2019,” the bank said.
The significant rise in reported value was due to high amounts recorded in attempted correspondent banking fraud (forgery of SWIFT advice).
Even while none of the correspondent banking fraud efforts resulted in losses for the banking industry, they did represent a reputational cost to certain institutions, whose employees were determined to be guilty in two of the three recorded instances.
Losses sustained as a consequence of fraud in 2020 are projected to be GH25.40 million, a 24 percent reduction from an estimated loss of GH33.44 million in 2019.
The COVID19 epidemic led to a significant increase in the usage of digital/electronic platforms for financial transactions. In order to limit the virus’s transmission, financial institutions urged clients to use the numerous digital goods and services available to complete financial transactions. The rise in use resulted in an increase in the occurrence of fraud using digital/electronic goods and services has resulted in a rise in losses caused by items such as E-Money and ATM/Card fraud.
The submission of 2020 fraud returns showed a modest improvement. Institutions continued to submit at a 100 percent rate, while the rural and community banking sector saw a 75 percent rise in submissions as a result of administrative penalties imposed on non-submitting banks in the first half of the year.
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