Banking and Finance Project Topics

Online Banking Fraud Impact on the Development of Nigeria’s Economy

Online Banking Fraud Impact on the Development of Nigeria’s Economy

Online Banking Fraud Impact on the Development of Nigeria’s Economy

Chapter One 


The general aim of the study is to analyze the consequences of bank fraud on the economic growth of Nigeria. With the following objectives of the study include the following:

  1. To recognize and identify the classifications of online banking frauds and other related activities in Nigerian financial institution and it impact on the development of Nigeria.
  2. To identify the effective control strategies and security measures for managing banks fraud and forgeries in Nigerian banking sector.
  3. To understand the various management geared towards eliminating or controlling financial crime.



Conceptual Framework

Fraud can be described as diverse means used by resourceful people to get an advantage over another by suppressing the truth, trickery misinformation, false suggestions, cunning, deceit, and other methods by which to cheat. By extension, fraud is clued embezzlement, theft, or any attempt to steal or unlawfully obtain the assets of banks Bank Administration Institute, (1989). Employees, customers, in conjunction with others within and outside the bank can commit fraud. Frauds are not new in banks; they are as old as the industry itself Chieze & Onu, (2013). Therefore, it is not surprising when it is realized that many Nigerians have chosen to become a sudden millionaires by engaged themselves in all sort of manna and activities that is constitutionally and traditionally wrong all in the name of becoming millionaire overnight, as a result of this fraudsters launch different attack on the bank with the wrong notion that the banking industry is one of the most buoyant and the most profitable sector of economy. It is believe that the banks make a lot of profit annually and is always liquid. Consequently, any amount of financial loss to bank will not materially affects its operation/existence however, this is not correct, because the published accounts of some banks show that some of their banks cannot even fully provide for losses sustained through fraud in their accounts Idowu, (2009). In view of this, management control systems aimed at preventing fraud and reducing fraud to its beeriest minimum. Fraud has been classified in various ways and using various parameters. However for the purpose of this research work, we shall employ the perpetrators criteria stated by Adeyemo (2012). A summary of the above shows that forgery is a type of frauds which falsify or manipulate documents. Basically it must be proved that: there is falsification in writing or alteration of an instrument, also that instrument is apparently capable of defrauding and intent to defraud. Experience has shown that most of such fraud is perpetrated by internal staff or by outsider who act in collusion with bank staff. These bank employees release the specimen signature of the customers being forged Nwaze, (2008). According to Adebayo & Topson, (2014), the causes of frauds and other fraudulent activities can be classified into primary and secondary. While the primary cause of a problem are often overlooked in most cases, and the secondary causes are chased. This research work will try to discuss the primary and the secondary cases so that corrective measures may be taken tocombat this menace. The primary causes of this economic dreadful conditions may linked to the general level of corruption, outrageous unemployment, serious social decadence, and wrong societal value system and deficient legal processes supported with bad governance. These causes are inter-related and with time they get holistic in nature. Corruption is an agelong phenomenon, and it is as old as human race. It has its root in all ideology, moral, culture, polity and intellect. It has eaten deep into the society to the point of losing sight of its detrimental and parasitic symbiosis with many polities including Nigeria and their citizens all over the world Akindele, (2005). Shogunle, (2012) gives some features to identify corruptions and they are any crime carried out primarily for economic gain; any crime requiring some form of organization (i.e. interaction, no one man show; any crime involving the use or non use or misuse of legitimate power, authority, force, techniques or commerce, industry or public service and administration. Derogatory value system and social decadence, which is also a form of a remote cause of fraud has plagued the country with misplaced value system; the sources of wealth of an average Nigerian is a thing of no consequence Adebayo & Tompson, (2014).





In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.


Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.


According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.

This study was carried to examine online banking fraud impact on the development of Nigeria’s economy. CBN, Uyo  form the population of the study.




This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.




It is important to ascertain that the objective of this study was to ascertain online banking fraud impact on the development of Nigeria’s economy. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of online banking fraud impact on the development of Nigeria’s economy


This study was on online banking fraud impact on the development of Nigeria’s economy. Three objectives were raised which included: To recognize and identify the classifications of online banking frauds and other related activities in Nigerian financial institution and it impact on the development of Nigeria, to identify the effective control strategies and security measures for managing banks fraud and forgeries in Nigerian banking sector and to understand the various management geared towards eliminating or controlling financial crime. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from staffs of CBN, Uyo. Hypothesis was tested using Chi-Square statistical tool (SPSS).


It could be concluded that there is a great level of interaction between bank fraud and economic development of Nigeria. This research work has attempted to highlight the incidence and magnitude of fraud and some of its negative impact on the Nigeria economy. Fraud inflicts severe financial difficulty on banks and their customers. It also leads to the depletion of shareholders funds and banks capital base as well as loss of customers money and confidence in banks. Such losses may be absorbed by the profits for the affected trading period and this consequently reduces the dividend available to shareholders. Losses from fraud which are absorbed by the equity capital of the bank impair the banks financial health and constrain its ability to extend loans and advances for profitable operations. In extreme cases, rampant and large incidents of fraud could lead to a bank’s failure or distress. The loss in funds affected the economy and it reduced the amount of money available to small or medium scale firms for developing the economy in which will increase level of unemployment rate, reduction in GDP and per capital income of the country. The costs of fraud are always passed on to the society in the form of increased customer inconvenience, opportunity costs, unnecessary high prices of goods and services and lack of infrastructure facilities that will aid the economy.


Banks need to strengthen their internal control systems to be able to detect and prevent fraud and fraudulent activities and to protect its assets.

The regulatory and supervisory bodies of banks in Nigeria need to improve their supervision using all tools at their disposal to appropriately check and curtain the incidence of fraud and fraudulent practices in the banking industry in Nigeria.

The Government, in every society, plays a key role in financial and other crime prevention. In this regard, the relevant institutions established to fight fraud including the Central Bank of Nigeria (CBN), Nigeria Deposit and Insurance Corporation (NDIC), Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM), Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission (ICPC), the Police, Judiciary, Standard Organization of Nigeria (SON), among others, should ensure the enforcement of various legal provisions in the fight against fraud in Nigeria.

Staff should not be allowed to stay on one function for long a period; they should be periodically rotated in order to avoid the possibility of exploring existing operational loopholes and short comings for personal gains.

Management should designed a software that will enable them to know the username used to checked both the running and dormant accounts with huge balance more than a time in a day. Reactivation of dormant accounts with huge balance should go beyond the normal laid down procedure and necessary sanctions should be melt out to an erring staff caught flouting the rules.


  • Abdullahi, R. & Mansor, N. (2015). Forensic Accounting and Fraud Risk Factors: The Influence of Fraud Diamond Theory. The American Journal of Innovative Research and Applied Sciences. 1 (5), 186-192. Association of Certified Fraud Examiners (2010). Report to the Nation on Occupational Fraud. documents/2010R
  • Adebayo, O. G. & Topson, A. O. (2014). Bank Frauds and Forgeries in Nigeria: A Study of the Causes, Types, Detection and Prevention. IOSR Journal of Economics and Finance (IOSR-JEF) 4 (2), 41-50
  • Adeyemo, K. A. (2012). ‘Frauds in Nigerian Banks: Nature, Deep-seated causes, Aftermaths and Probable Remedies’ Mediterranean Journal of Social Sciences, 3 (2), 64-72
  •  Akindele, S. T. (2005). “A Critical Analyze of Corruption and its Problems in Nigeria” Anthropologist, 7 (1), 7 – 18
  •  Asukwo, P. E. (1999). Bank Frauds: A Look at the Nigerian Banking Cleaning System. ICAN News, 4 (1), 16 – 19
  •  Asli, D. & Emna, D. (1998). The Determinants of Banking Crisis in Developing and Developed Countries. International Monetary Fund Staff Papers. 45 (1), 20-35.
  •  Akindele, R. I. (2011). “Fraud as a Negative Catalyst in the Nigerian banking industry”. Journal of Emerging Trends in Economics and Management Sciences, 2(5), 5357-5363 Chicago: Fraud prevention series.
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!