Financial consultant and senior lecturer at the University of Professional Studies, Accra, Dr. Philomena Dadzie, has urged banks to implement more rigorous background checks and enforce staff accountability.
In an interview with The High Street Journal, she highlighted that these measures are crucial for mitigating the financial losses associated with fraudulent activities within the banking sector.
Her remarks come at a time when the Bank of Ghana (BoG) has reported a 46% increase in fraud cases involving staff. This surge underscores significant vulnerabilities within the sector, with the number of staff implicated in fraudulent activities rising from 188 cases in 2022 to 274 cases in 2023.
The Specialized Deposit-Taking Institutions (SDIs) in Ghana have reported a concerning escalation in cash theft, particularly cash suppression, which recorded the highest fraud loss in 2023, totaling GH¢14.8 million, a staggering 14-fold increase from GH¢1 million in 2022. This alarming trend highlights the urgent need for banks to reassess their internal controls and recruitment processes.
Dr. Dadzie noted, “These are only reported cases; I’m sure there are some that are also unreported. Some banks don’t conduct thorough background checks before recruitment, which is crucial. When some people come in, their attitude changes.”
Most reported fraud cases have originated from the Rural and Community Banking (RCB) sub-sector, illustrating its vulnerability despite an overall decrease in fraud incidents.
The BoG has expressed serious concern over these statistics, urging banks and SDIs to take immediate action to mitigate risks. The central bank is advocating for enhanced internal controls, improved staff due diligence during recruitment, and continuous in-house training on professional conduct.
To further strengthen accountability, Dr. Dadzie recommended that banks require staff to be bonded.
“They must have character, and they should sign a bond. This way, they are held accountable for their actions,” she stated, adding that while credit union staff are typically bonded, this practice should be standard across all banking institutions.
The increase in fraudulent activities has been compounded by substantial cash theft incidents. One notable case involved a theft of USD 466,000 at a universal bank, which significantly impacted loss values when converted to Cedi terms. Additionally, fraudulent activities involving foreign currencies contributed to the overall loss, with total values reaching USD 1.7 million and GBP 0.048 million in 2023.
Despite a reduction in overall fraud cases, the sharp increase in total losses underscores the need for continued vigilance and improved security measures within the RCB sub-sector and the broader SDI landscape.
The urgent call for stronger background checks and staff accountability is essential for fostering a more secure banking environment and mitigating the risks posed by fraud.
