Financial Institutions Training Centre (FITC), has reported an 8,993 per cent  rise in fraud losses in Nigeria banks, totaling N42.6 billion in  second quarter of this year.

The report noted that the amount lost between April and June 2024 alone exceeded the N9.4 billion lost to fraud by the banks throughout the entire 2023.

According to the FITC Report on Fraud and Forgeries, Quarter 2, 2024, which was released on Saturday, the Q2 loss shows an 8,993 per cent increase in loss when compared with the N468.4 million lost in Q1 2024.

This also represents a 637 per cent increase when compared with the N5.7 billion loss recorded in Q2 2023.

FITC said ‘miscellaneous and other fraud’ types constituted the largest loss, representing 96.46 per cent of the total amount lost, with a value of N41.14 billion.

This was followed by losses from fraudulent withdrawals and computer/web fraud, amounting to approximately N781.2million and N400.7million, respectively.

The FITC report stated that there was a staggering 1,784 per cent increase in the total amount involved in fraud cases from Q1 to Q2 2024, with the sum escalating from N2.9billion to approximately N56.3billion in Q2.

The increase via cash is likely to be fuelled by the demand for cash ransom for kidnapped citizens by bandits.

A further analysis of the data shows a significant rise in the amount lost across all channels, except for mobile fraud, which recorded a decline.

In terms of magnitude, losses through bank branch-related channels rose by 31,497 per cent to a value of N42.2 billion in Q2 from N133.9 million in Q1 2024.

Additionally, computer/web frauds also saw a monumental increase of 1,560 per cent, with losses growing from N24million to N400.8million.

However, there was no indication of the amount lost due to ATM-related fraud, while mobile fraud recorded a decline in the amount lost from the previous quarter, decreasing by 59 per cent from N216.4 million in Q1 to N88.7 million in Q2 2024.

During the second quarter of 2024, fraudulent activities were carried out through various channels, including ATMs, online platforms like web and mobile banking, bank branches, and point-of-sale (POS) terminals.

Among instruments used, card fraud recorded a significant decrease, declining by 47.66 per cent. from 21,469 in Q1 to 11,237 in Q2.

In contrast, fraudulent activity involving cheques and cash increased by 36.67 per cent and 9.09 per cent, respectively, with cheques surging from 30 cases in Q1 to 41 cases in Q2, while the use of cash rose from 209 in the first quarter of 2024 to 228 in the second quarter of 2024.

With the staggering increase in losses to fraud, the FITC advised the banks to enhance their monitoring and auditing procedures.

According to the Centre, deposit money institutions can utilize AI-driven tools that flag unusual entries or patterns to implement continuous and automated monitoring systems that can detect anomalies or discrepancies in settlement files.

Additionally, regular unannounced internal audits focusing specifically on settlement processes can be conducted to identify and address any irregularities promptly.

“Access controls should also be strengthened by limiting access to settlement files to only a small, vetted group of authorised personnel given the appropriate clearance and are regularly trained on the latest security protocols.

“The implementation of multi-factor authentication (MFA) and role-based access controls (RBAC) can aid the reduction of the risk of unauthorised changes to settlement files,” FITC stated.

Huawei has won a $3 million cloud computing contract from the United Bank for Africa (UBA), which will see Huawei provide UBA, one of Nigeria’s largest financial institutions, with 200 petabytes of storage, as well as cloud computing solutions.

The deal is particularly notable given IBM’s longstanding stronghold on Nigeria’s banking sector.

UBA reportedly chose Huawei for its more cost-effective and scalable offering, which comes as UBA’s existing infrastructure was reaching capacity.

Zhang Li, VP of Huawei Cloud Africa, said of the deal: “This is a milestone achievement for Huawei Cloud in Nigeria and Africa at large. UBA is a key player in the African banking industry, and we are excited to help them drive digital transformation. We believe this partnership will be a game-changer for the financial sector in Africa.”

The contract will help UBA with its digital transformation efforts and is hoped to improve its operational efficiency, data storage, and customer experience.

UBA had previously relied on IBM and VMware for storage and virtualization technologies. However, VMware’s shift to a subscription model following the acquisition by Broadcom saw licensing costs for UBA nearly triple.

This is the second cloud migration story we have covered this week alone that cites the Broadcom/VMware acquisition as a motivating factor, the other being the University of Waikato.

Other banks in Nigeria including Zenith Bank, Fidelity, Opay, and First Bank are also adopting Huawei’s cloud computing solutions, some opting for a hybrid approach by also using IBM’s technology for critical workloads.

Huawei is reportedly in talks with a least one other major Nigerian bank for cloud and storage services.

Dr. Emonotimi Agama, director-general, Securities Exchange Commission (SEC), has disclosed that 50 cryptocurrency exchanges have applied for operational licences in the country.

Agama who spoke during a fireside chat at the BusinessDay Blockchain Conference in Lagos recently, said the commission received “50 applications and has accepted seven firms into its programmes”.

“Our work at the SEC is to protect investors and foster market development,” he said.

“The commission is open to innovation. Businesses must meet regulatory and compliance requirements to ensure the growth of a stable and sustainable digital economy.”

According to him, the government is receptive to crypto and blockchain because it has seen the country’s youths adopt the technology.

Agama added that the pace of acceptance of digital assets may vary across different sectors but will eventually happen.

“For innovators, we encourage you to seize the opportunity to develop blockchain solutions tailored to Africa’s unique needs,” he said.

“Focus on solving real-world problems, such as financial exclusion, inefficient supply chains, and lack of transparency in governance.”

Recall that SEC had on August 29, granted Busha Digital Limited and Quidax Technologies Limited “approval-in-principle” to commence operation under the accelerated regulatory incubation programme (ARIP).

The ARIP was introduced by the SEC to onboard firms that had already begun operations before the release of the rules on virtual asset service providers in May 2022

The commission equally introduced the regulatory incubation programme (RIP) designed to evaluate the business models of digital asset firms and allow them to test their products, services, and technology in a real-world market environment under the regulator’s close supervision.

The commission also said additional licence applications were being assessed and that approvals-in-principle would be granted on a case-by-case basis once the requirements were met.

However, on September 4, SEC clarified that it has not yet fully licenced any cryptocurrency exchange.

On his part, Buchi Okoro, chief executive officer (CEO) of Quidax, said regulation helps check operators’ activity in the space and protect investors.