Financial Crime World

Types of Financial Fraud in Ghana: Staff Involvement, Digital Transactions Top Worries

The Bank of Ghana has released a report highlighting the alarming rate of financial fraud in the banking sector. The report reveals that more than half of incidents of fraud in 2020 were aided by staff members, with a total value of reported cases reaching GH¢1 billion for the first time.

Staff Involvement in Financial Fraud

  • 56% of all reported cases involved staff: The report highlights the significant role played by bank employees in perpetuating financial fraud.
  • Cash suppression: 73.3% of all reported cases: This type of fraud involves staff taking cash from customers but not recording the full amount in the books, resulting in a loss of GH¢1.6 million for rural community banks.

Digital Transactions and Financial Fraud

  • Increase in digital transactions due to COVID-19 pandemic: The report notes that the pandemic has led to an increase in digital transactions, exposing customers and the banking sector to higher levels of fraud.
  • ATM/POS related fraud: 32.2% of total loss incurred: This type of fraud accounted for a recorded loss value of GH¢8.19 million, representing a 548.1% increase year-on-year.
  • E-money fraud: 180-percentage point increase: Losses from e-money fraud rose from approximately GH¢370,000 in 2019 to an estimated GH¢1.04 million in 2020.

Recommendations to Address Financial Fraud

  • Adequate vetting of contract/temporary staff: The Bank of Ghana recommends that contract/temporary staff be adequately vetted by the Police and Bank of Ghana.
  • Equitable minimum standards of payment for temporary staff: The report suggests setting equitable minimum standards of payment for temporary staff assigned to the sector.
  • Strengthening Know Your Customer (KYC) and transaction monitoring systems: Providing regular consumer education on cyber security is also recommended.
  • Encouraging the use of efficient electronic payment methods

Factors Contributing to Financial Fraud in Ghana

  • Inadequate vetting processes
  • Poor remuneration
  • Weak internal controls
  • Lack of accountability and transparency

The Bank of Ghana has called for urgent action to address these issues and reduce the incidence of financial fraud in the country.