High fraud cases in banking sector not entirely linked to poor service conditions – John Awuah

Chief Executive Officer of the Ghana Association of Bankers, John Awuah says the high fraud cases reported by the Bank of Ghana (BoG) in the banking sector cannot be entirely blamed on the poor service conditions of workers.

Speaking on JoyNews‘ PM Express Business Edition, he noted that although poor working conditions could play a role in the fraud cases, other issues such as lack of integrity is a contributing factor.

“Human as we are, no matter how much you are paid, it is only good for a few months and the next time, you are looking for something else. It is a matter of integrity.”

“If you want to work in the bank, you must be a person of integrity. The people who work in the banks are not people we moved from some special places. They are Ghanaians, the people we see in our churches, our roads, in the markets. If you give your mason ¢100 to buy 10 bags of cement, and you turn and he goes and buys 5 [bags], if that person was working in the bank, he will be a fraudster”, he explained.

“I think there is a broader problem. Yes, there are challenges with control lapses which results in some of the fraud incidents we are seeing. But I don’t think we can overlay all on conditions of service of the people who are perpetrating these kinds of frauds,” he explained on Thursday”, he added.

According to him, the issue of fraud as reported by the Central Bank cuts across the hierarchy and not just persons in a particular class.

His statements are in response to reports from the Bank of Ghana that revealed that reported fraud cases in the banking industry witnessed a substantial increase.

Even though the banking sector did not suffer any losses from any of the correspondent banking fraud attempts, the report said it posed a reputational risk to some banks, whose staff were found culpable in two of the three reported incidents.

However, losses incurred as a result of fraud for 2020 stood at ¢25.40 million, as compared to an estimated loss of ¢33.44 million in 2019, representing a 24.0% decrease.

Staff involvement in the commission of fraud also experienced a significant increase, especially the suppression of cash.

56% of reported fraud cases and 93% of reported cash suppression cases involved staff of the reporting institutions [banks and SDIs].

To resolve the canker, Mr Awuah suggested taking a holistic view and review how issues of fraud are dealt with and managed.

“I think the fraud issue is a broader issue and yes, as banks we will do our part but it is something we need to take as a national problem and deal with it.”

For him, it is troubling to record a single case of fraud even though the Central Bank’s report made mention of no losses incurred because it has a negative impact on the confidence in the sector.

“If you are a bank and today you are in the news that some fraud issue has happened against your bank, apart from the potential financial loss, the reputation, the impact on your brand can be very damaging…It is a worry, even if we record one in the entire banking industry, it is a worry to us. Therefore, we take reports such as this seriously,” he stressed.

He, therefore, admonished banks to intensify training for their workers so they do not fall prey to the tactics of fraudsters.

“The answer is training to make sure people understand exactly what they are doing. Because when they say a staff of the bank is involved, it may not necessarily mean the staff was part of the fraudulent activity in order to benefit personally but because the staff perhaps was negligent and a fraudster took advantage.”

“So training is a critical component of whatever as banks we have to do,” he stressed.

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