Fraud and forgery cost Wema Bank $595,000 in 2023, launches anti-fraud campaign

Wema Bank, a Nigerian bank, reported losses of ₦685 million ($594,943) due to fraud and forgery in 2023.

The losses were incurred through the bank’s digital and collection/payment channels, which included third-party platforms.

Following the fraud report, Wema is strengthening its fraud monitoring process, adding more people in its digital compliance department. It has also launched an anti-fraud campaign to keep customers safe from fraudulent activities.

READ ALSO: Wema Bank Plc Posts N43.59 Billion Profit Before Tax
Wema Bank is a tier-2 bank with ₦1.8 trillion ($1.6 billion) in consumer deposits. In 2023, the company reported a digital income of ₦745 million, including ₦7.3 billion in fees from electronic products. Besides, Wema’s ALAT gained 2.1 million new users in 2023.

The bank has also reportedly stated that the number of fraud cases in Q1 2024 decreased significantly and that the 2024 fiscal year will not have the same volume of fraud and forgery as 2023.

Wema Bank’s 2023 fraud report comes two weeks after Access Bank, another Nigerian commercial bank, reported losses of ₦6.15 billion from fraud and forgery, up from ₦1.44 billion last year.

According to Access Bank, fraudulent transfers, withdrawals, and reactivation accounted for 80% of the losses, with 29% coming from fund embezzlement, which included cash theft, electronic fraud, and USSD.

According to a report, Nigerian banks lost ₦5.79 billion in Q2 2023 due to fraud and forgeries, up from ₦472.28 million in Q1 of the same year.

Chart: In the past ten years, Nigerian bank clients have lost ₦45 billion due to fraud and forgery

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In addition to the fraud report, Wema Bank reported a 71% increase in gross earnings to ₦226 billion from ₦133 billion in 2022. It saw growth in four other revenue streams: net interest income, account maintenance fees, and FX transactions. It also expanded its loan offerings, yielding an impressive return on loans made to customers.

Another banking concern in Nigeria is point-of-sale fraud. In Q2 2023, the Financial Institutions Training Centre (FITC) reported 1,994 cases of PoS fraud, resulting in a loss of ₦428 million ($474,770).

However, the Nigerian Electronic Fraud Forum (NeFF) and the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) have collaborated to develop a feature that detects fraudulent transactions on PoS terminals in Nigeria.

In other news, commercial banks across Africa have reported losses due to digital fraud. Tanzania’s central bank reported in March 2024 that digital fraud in Tanzania’s commercial banks increased by 84% in the fourth quarter of 2023 compared to the previous year. In Kenya, Absa Bank Kenya reported in December 2023 that it had lost KSh 107.7 million ($716,566) to fraud in 2022.

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