-But Total Losses Surge by 21% in 2023 Amidst Rising Cash Theft and Foreign Currency Fraud
On the surface, a 17% drop in fraud cases across Ghana’s banking sector might seem like good news. Banks reported 969 cases of fraud in 2023, down from 1,163 cases the previous year.
But beneath the declining case numbers lies a far more troubling figure: total losses surged, up 21% year-over-year, with the sector haemorrhaging GH¢63 million in fraud-related losses in 2023, compared to GH¢52 million in 2022.
Cash theft, or cash suppression, catapulted to the top of the list as the most significant fraud type. Losses in this category alone skyrocketed to GH¢14.8 million, a 14-fold increase from GH¢1 million in 2022. Historically, cash suppression fraud has been more endemic to the rural banking sector, where smaller institutions are easier targets.
However, 2023 saw a shift, with universal banks now facing substantial losses. One case in particular, a USD 466,000 theft at a universal bank sent shockwaves through the sector and, when converted to Cedi terms, pushed the total loss figure higher than anticipated.
Fraud in foreign currencies compounded the damage, adding another layer of complexity to the loss numbers. Banks reported USD 1.7 million and GBP 0.048 million in fraudulent losses in 2023. The impact of these foreign currency frauds rippled through the sector, their losses exacerbated by fluctuations in exchange rates, further magnifying the financial blow in local currency terms.
Even as the overall number of fraud cases declined, some types of fraud showed a stark increase, namely ATM/POS/Card fraud, which ballooned from just 9 cases in 2022 to an eye-popping 218 cases in 2023. Analysts point to the rapid proliferation of digital payment channels as a double-edged sword. While these platforms offer greater convenience for consumers, they also create fertile ground for opportunistic fraudsters to exploit weaknesses in ATM, POS, and card payment systems.
But it wasn’t just cash theft and card fraud making headlines. Cyber/email fraud, a perennial concern for financial institutions worldwide, accounted for GH¢10.5 million in losses. Fraudulent withdrawals chipped away another GH¢8.4 million from the sector. Forgery and document manipulation, which had loomed large in 2022 with a staggering GH¢32 million in losses, dropped sharply by 78%, though it still cost banks GH¢6.9 million in 2023. Cheque fraud, while less headline-grabbing, added another GH¢6.1 million in losses to the tally.
It’s clear that even as banks manage to clamp down on certain types of fraud, such as forgery, they are increasingly vulnerable to sophisticated schemes involving digital platforms, cash, and foreign currencies. The trend of rising loss values, despite falling case numbers, underscores a growing concern: high-value fraud schemes are becoming more prevalent, and the cost to banks is rising.
Regulators and industry insiders are now calling for urgent action. As financial institutions face growing pressure to protect both their bottom line and their customers, the Bank of Ghana is urging banks to double down on the security features of their electronic banking systems.
The current environment demands stronger safeguards against increasingly agile fraudsters who are finding new ways to penetrate digital networks and payment platforms.
