ABSTRACT
This research work aims at
determining the role of information and communication technology in detecting
fraud in the Nigerian banking system. The banking institution which has
integrity and trust as its hallmark has been exposed to various forms of fraud
and various means employed in defrauding banks. Fraud derails the society’s
integrity and value among the committee of nations and in effect, affects the
level of trust. The banking sector has been the cornerstone of economic and
financial mainstay of any nation, hence the need for study of the role and the
effectiveness of information and communication technology in fraud detection in
the banking industry. First Bank of Nigeria Pie, Enugu metropolis was used as a
case study. The research work treated the causes of fraud in Nigerian banks,
forms of bank frauds, Effects and consequences of fraud in first bank of
Nigeria plc, the information and communication technology and fraud detection
in banks and Fraud control measures in banks.
The methodology adopted in this
study is the survey research design%. There were interactions with bank staff
of various cadres with structured questionnaire to know their own opinion. 400
questionnaires were administered of which 320 were duly completed and returned.
Some of the findings from the research work reveal that lack of staff
motivation has an effect on the incidence of fraud in Nigerian banks. It also
reveals that the introduction of ICT into the banking industry has reduced the
incidence of fraud in Nigerian banks. Further findings reveal that the Nigerian
banking laws are not adequate for fraud control in banks.
Based on the findings of this
study, recommendations made are the adoption of computer aids as tool for fraud
prevention and control; banks should employ highly sophisticated security
gadgets in their banks, like surveillance TV systems, on — the- spot
photographing of customers etc. Proper reviewing of laws relating to fraud
should be encouraged and stern penalties that commensurate with any offence
committed should be embarked on.
CHAPTER ONE
1.1 BACKGROUND OF STUDY
Historically,
fraud has always existed with the nature and life of mankind. There is a
general consensus amongst criminologist that fraud is caused by the elements
called “WOE”- Will, Opportunity and Exit. i.e., the will to commit the fraud by
the individual the opportunity to execute the fraud and the exit which is the
escape from the sanctions against successful or attempted fraud.
Fraud
is a global phenomenon. It is not unique in any sector of the economy or
peculiar to Nigeria. The level of fraud in the present day Nigeria has assumed
an epidemic dimension. It has eaten deep into every aspect of our life to the
extent that a three year old child talks about yahoo mail or 419, newly
discovered sobriquet for advanced free fraud that is hunting us as a nation.
Nigeria, with all of its natural and human resources, tethers on the brink of
destruction because of fraud. Much of what we do is “cutting leaves” instead of
dealing with the root problem. Generally, fraud takes its root from the human
heart. It is an axiom that the heart is deceitful above all things and is
desperately wicked.
Fraud
is the number one enemy of the business world, no company is immune to it and
it is in all works of life, it is becoming predominant in the banking industry,
as banks are now persistent targets of frauds. Nwankwo (1991) said that there
is no where fraud is more serious than in banking. It is the biggest cause of bank failure. The fear is
now rife that the increasing wave of fraud in the financial institutions in
recent years, if not arrested might pose certain threats to stability and the
survival of individual financial institution and the performance of the
industry as a whole and no area of the economy is immune from fraudsters and
even the banking system. Fraud if not checked might cause run on in the banking
sector.
Fraud
together with its sister white-collar crimes which came into being later in the
19th and 20th century inter alia corruption, money laundering, tax evasion,
externalization of foreign currency to itemize just a few have stood as potent
weapons capable of hemorrhaging the entire world economies particularly the
banking sector because of its high risk factor.
Since
fraud is carried out over a period of time, a minor one at the initial stage
snowballs into a sizeable one over a period of time. However, the incidence of
fraud has become a nightmare to the bankers who are particularly concerned, not
only because it is on the increase, but also it acquires sophistication and tries
outwitting every new technology. In the past years, cases of frauds in banks
have been on the increase with each year recording staggering figures, even
though most of the reported cases are essentially different types of fraud, An
example is defrauding a bank using a genuine account of an employee who is the
defrauder.
Another one is through the use of
fictitious account; also, fraud is carried out with the aid of an employee’s
friend. Similarly this unhoiy act is sometimes done using an account of a third
party that depends on an employee-insider to perpetrate the cnrne.
Fraud
is a universal phenomenon which has been in existence for so long. Its
magnitude cannot the security team designed to prevent it. Its management has
become a central point in banking like the management of risk because of the
above fadts. Fraud and its management have been the precipitating factor in the
distress of banks, and as much as various measures have been taken to minimize
the incidence of fraud, it still rises by the day because fraudsters always
device tactical ways of committing fraud. This has become a point of great
attention in the banking sector as well as every organization in Nigeria.
Technology
is invented by man to manipulate his social and physical environments. The
sociology of science and technology made us to understand that, technology came
with both manifest and latent intents. The manipulation of computer and other
information and communication technology (ICT) to detect fraud in banks gives more
insight into the manifest function of technological revolution. When computer
was invented, the intention of its inventors is to hasten data processing with
effortless ease. That it has been doing efficiently by giving timely and
accurate information. The ability of computer to control manipulations......
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