EFCC Chairman: 70% of Financial Crimes in Nigeria Traced to Banking Sector

•Urges chief audit executives to take lead in fraud prevention

Emmanuel Addeh  and Folalumi Alaran in Abuja

The Chairman, Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, has disclosed that an estimated 70 per cent of financial crimes in Nigeria could be traced back to the banking sector.

Olukoyede, made this revelation during the 2024 Annual Retreat/Conference of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) held yesterday in Abuja.

With the theme of the event: “The Role of the Internal Auditor in Promoting Stability in the Financial Services Sector and National Economic Growth,” the EFCC boss who was represented by the Director Internal Audit EFCC, Mrs. Idowu Apejoye, emphasised the pivotal role of Chief Audit Executives in combating fraud within the banking sector.

He stated, “As Certified Bankers and professional auditors, you have an important role to play in sanitising, stabilising and strengthening the financial services sector and by extension growing the commanding heights of our economy.

“In Nigeria particularly, the banking sector is increasingly becoming a cesspool of fraudulent activities and this is raising considerable challenge and concerns to the EFCC.

“Broadly speaking, banking fraud in Nigeria is both insider and outsider-related. The insider-related fraud comprises outright stealing of customers’ deposits, authorised loan facilities, forgery and several other kinds of unhealthy and criminal practices.”

According to him, the outsider-related ones include hacking, Automated Teller Machine (ATM) fraud, conspiracy, among others.

“And the absurd one is when there is collaboration between the both of them. It is estimated that about seventy percent of financial crimes in Nigeria are traceable to the banking sector, this scenario is disturbing and unacceptable,” he added.

The EFCC Chairman further highlighted the multifaceted responsibilities of internal auditors in the financial sector, ranging from risk assessment and fraud prevention to enhancing operational efficiency.

He underlined the importance of their role in providing strategic decision-making insights and promoting stability in the financial system.

He added: “The role of Chief Audit Executives in the fight against corruption is enormous. Every audit engagement promotes management of economic entities and the society as a whole. Globally, the most effective measures against financial practices are prevention strategies owing to their cost-effective benefits.

“The Chief Audit Executives should consider how risk of fraud is managed across the organisation and assess the fraud risk exposure periodically.”

The Chairman of ACAEBIN, Prince Akamadu, on his part emphasised the need for introspection within the banking industry and a reassessment of its role in addressing challenges for economic growth.

Akamadu, in an interview on the sidelines, while responding to issues about cumbersome regulatory reporting processes, and how to address fraudulent calls claiming to be from banks and other related matters, reassured that disciplinary committees address staff involvement in fraud, emphasising the industry’s commitment to maintaining its integrity.

“By the end of this retreat. We are expected to come up with a communique. And we hope to address some of the issues one way or the other that will address the role of banks in the challenges in this industry given that it is multi-faceted, there’s no institution in any sector that has done more in the area of Know Your Customer (KYC) than the banking industry,” he added.