Access Bank Reports Significant Losses to Fraud and Forgery in 2023

Access Bank, Nigeria’s leading commercial bank in terms of assets, has released its 2023 financial reports, declaring a substantial increase in losses attributed to fraudulent activities and forgery, amounting to ₦6.15 billion compared to ₦1.44 billion in the previous year. 

Predominantly, fraudulent transfers, withdrawals, and reactivations accounted for 80% of the losses, while embezzlement constituted 29%, encompassing instances of cash theft, suppression, pilferage, and dry posting. Electronic fraud and USSD transactions contributed 9% to the total losses.

This revelation surfaced as part of Access Bank’s financial statement review for the year ending December 31, 2023. The report disclosed a total of 6,771 attempted incidents of electronic fraud and USSD transactions in 2023, involving approximately ₦2.69 billion. However, the actual losses incurred amounted to only ₦92.2 million.

Contrastingly, electronic fraud and USSD transactions dominated the fraud landscape in the previous year, constituting 80% of all reported cases. The number of attempted incidents in that period nearly doubled compared to 2023, totalling 11,403 attempts, resulting in losses almost 13 times higher at ₦1.15 billion.

While Access Bank's specific anti-fraud measures, particularly those undertaken by its subsidiary, Access Holdings, were not explicitly outlined in the report, the significant reduction in electronic fraud incidents suggests effective countermeasures implemented by the bank.

However, Access Bank is not alone in combating electronic fraud within the Nigerian banking sector. Reports indicate that Nigerian banks collectively lost ₦5.79 billion to fraud and forgery incidents in the second quarter of 2023, marking a significant increase from the ₦472.28 million reported losses in the preceding quarter.

Various organizations, including the Nigerian Electronic Fraud Forum (NeFF), the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN), and the Nigeria Inter-Bank Settlement System (NIBSS), are actively collaborating to devise strategies aimed at curbing fraudulent activities within the industry.

Furthermore, instances of electronic financial fraud have been witnessed across other platforms. For instance, Union54, a Y Combinator-backed card issuing platform, grappled with chargeback fraud in 2022, leading to the temporary suspension of its virtual card offerings. Despite averting potential losses exceeding $1 billion, Union54 incurred approximately $500,000 in chargeback fees and ultimately discontinued the product.

Similarly, Interswitch, a Nigerian integrated payment platform, reportedly encountered losses amounting to ₦30 billion due to chargeback fraud, albeit managing to recover a portion of it.

Access Bank, alongside other financial institutions, also faces challenges associated with Point-of-Sale (POS) fraud. The second quarter of 2023 witnessed approximately 2,000 reported cases of POS fraud, resulting in losses totaling ₦428 million, with an additional ₦450 million recorded in the preceding quarter attributable to POS fraud.