Analysis of Fraud in Banks: The Nigeria Experience

Abstract

Research Objectives: The study focused on the analysis of fraud in Nigeria. The objectives of the study were to analyse the effect of fraud cases, employee fraud and amount involved in fraud on the soundness of money deposit banks in Nigeria. 

Methodology: The ex-post-facto design was employed for the collection of secondary data from Nigerian Deposit Insurance Corporation (NDIC) annual reports for the period of 2002 to 2020 and analysed using descriptive statistics, correlation matrix and ordinary least squares regression technique. 

Findings: The results revealed fraud cases had a negative and insignificant effect on soundness of deposit money bank at p-value > 0.05, employee fraud had a negative and significant effect on soundness of deposit money bank at p-value < 0.05 and amount involved in fraud had a positive and insignificant effect on soundness of deposit money bank at p-value > 0.05. 

Recommendations: The study recommended that bank management should continue to utilize temporary staff as a cost saving means of conducting their business activity, extra security measures including comprehensive background check of staff must be put in place to minimize the incidences of frauds and forgeries committed by employees.