CHAPTER ONE

Fraud remains one of the most persistent threats to the stability of financial institutions globally, and Nigeria's banking sector is no exception. Bank fraud encompasses any intentional act of deception carried out against a financial institution or its customers for unlawful gain, and includes all intentional actions aimed at deceiving a financial institution or an individual (Al Hattali et al., as cited in MDPI, 2023). As digital transactions have expanded across the Nigerian financial system, exposure to fraud has grown correspondingly. According to the Nigeria Inter-Bank Settlement System (NIBSS), Nigerian banks lost over ₦14.3 billion to fraud in 2023 alone, underscoring the urgency for advanced and proactive fraud detection mechanisms (Alaba et al., 2025). More recent industry data indicates that although the number of reported fraud incidents has declined, associated financial losses rose sharply from ₦17.67 billion in 2023 to ₦52.26 billion in 2024, signaling increasing sophistication in attack methods (Uche, 2026).

The drivers behind this growth are well documented in the literature. Increased internet penetration, mobile banking adoption, and customer demand for more efficient banking services have pushed Nigerian banks toward digital transformation, but this same shift has made the sector increasingly vulnerable to cyber fraud, identity theft, insider fraud, phishing, card skimming, account fraud, and fraudulent electronic transactions (Alaba et al., 2025; Owolabi, 2020, as cited in Alaba et al., 2025). The relationship between ICT adoption and fraud incidence is, however, more complex than a simple cause-and-effect narrative would suggest. Awotomilusi and Ajoloko (2022) examined the effect of automated teller machines (ATMs), point-of-sale (POS) systems, and mobile banking payment platforms on fraud cases among listed deposit money banks in Nigeria between 2009 and 2019, and found that automated teller machines and mobile banking payment systems have a positive and significant effect on the number of fraud cases, while point-of-sale technology has a negative and significant effect, indicating that the advent of ICT has had a mixed, and in some respects, scandal-contributing influence on Nigerian deposit money banks (Awotomilusi & Ajoloko, 2022). This nuance reinforces the need for empirical, bank-specific investigation rather than an assumption that ICT adoption alone resolves fraud exposure.

Beyond the technological dimension, structural and human factors within banks materially shape fraud incidence. Oyelade (2024) conducted a descriptive study among 180 bank employees and managers of deposit money bank branches and a microfinance bank in Ugbowo, Benin City, and found that three main groups, namely bank employees, bank customers, and contract staff, perpetrate frauds in Nigerian banking institutions, with contract staff singled out as the prime culprit (Oyelade, 2024). The same study identified that inadequate cybersecurity, weak internal control systems, and poor remuneration serve as fraud motivators, with the use of contract staff in the employment process identified as the most important factor motivating bank workers toward fraudulent practices (Oyelade, 2024). In a related vein, Tanko (2024) examined labour casualisation in Nigerian banks and observed that the casualisation of bank staff has implications that extend to fraudulent activities, prompting calls for the Central Bank of Nigeria to intervene in the practice (Tanko, 2024). These findings lend continued empirical relevance to investigating staff motivation as a contributing factor to fraud incidence in Nigerian banks.

Regulatory and institutional weaknesses further compound the problem of fraud control. Ogunyemi (2024), in a qualitative study of internal control mechanisms in two Nigerian commercial banks, observed that inadequate regulatory enforcement and poor oversight constitute the main cause of fraud and forgeries in Nigerian banking institutions, and that the lack of adequate punishment for fraudsters creates further opportunity for like-minded individuals to commit fraud (Ogunyemi, 2024). The same study concluded that Nigerian banks must prioritize protecting client data and strengthening security systems in line with international standards if internal control procedures are to succeed in detecting and preventing fraud (Ogunyemi, 2024). This conclusion is reinforced by Akintola et al. (2025), who examined fraud and the performance of the Nigerian banking industry between 2012 and 2023 using data from the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation, and found that the performance of the Nigerian banking industry is significantly influenced by the number of fraudulent cases, the number of staff involved, and the total monetary value involved (Akintola et al., 2025). The study recommended that government regulatory systems be strengthened alongside bank-level internal controls (Akintola et al., 2025).

Cybersecurity, as an extension of ICT, has also been examined directly in relation to financial statement fraud in Nigerian banks. Fatoki (2023) found that fraud detection and audit procedures had no significant effect on financial statement fraud in Nigerian banks, whereas audit timeliness had a significant effect, and recommended that Nigerian deposit money banks prioritize improving audit timeliness while also exploring the integration of advanced technologies such as machine learning and big data analytics to strengthen fraud detection and prevention (Fatoki, 2023). According to Fatoki (2023), cybersecurity strategies serve as essential components of an integrated fraud detection system within banks, and network security comprises the measures and protocols implemented to protect computer networks from unauthorized access, data breaches, attacks, and other threats. This finding is instructive because it suggests that ICT tools function best as part of an integrated detection system rather than as a standalone safeguard.

Forensic accounting, which relies substantially on ICT-based data analytics, has likewise been examined as a complementary mechanism for fraud detection in Nigerian banks. Kalu and Nwosu (2022) investigated the impact of forensic accounting on fraud management in Nigerian banks and reported a significant positive relationship between forensic accounting practices and improved fraud management outcomes (Kalu & Nwosu, as cited in Journal of Advance Research in Business, Management and Accounting, 2024). Hassan and Sanni (2023), in a related study on enhancing fraud detection in Nigerian banks through forensic accounting, similarly found that the application of structured forensic and data-analytic techniques strengthens the capacity of banks to detect fraudulent transactions (Hassan & Sanni, as cited in Journal of Advance Research in Business, Management and Accounting, 2024). These findings collectively suggest that ICT-enabled detection tools, whether embedded in core banking systems or applied through forensic accounting techniques, contribute meaningfully to fraud detection capacity, but their effectiveness depends on complementary controls such as staff motivation, audit timeliness, and regulatory enforcement.

It is against this evolving technological, behavioural, and regulatory backdrop, where ICT offers significant promise for fraud detection but where its effectiveness is mediated by staff conduct, institutional controls, and regulatory adequacy, that this study evaluates the role of information and communication technology in fraud detection in Nigerian banks, with specific reference to First Bank of Nigeria Plc, Enugu.

1.2 STATEMENT OF THE PROBLEM

Despite considerable investment in ICT infrastructure, Nigerian banks continue to record substantial fraud-related losses, many of which go underreported due to reputational concerns. Underreporting and the resultant loss of public confidence remain pressing issues, as disclosure risk can affect customer trust and a bank's growth trajectory. Financial losses from fraud reduce distributable profits, impair capital adequacy, and in extreme cases threaten bank solvency.

Recent data illustrates the scale of this problem. Losses attributable to digital and cyber-enabled fraud have grown substantially in recent years, even as the raw number of reported incidents has declined, indicating that fraud techniques are becoming more sophisticated rather than less prevalent (Uche, 2026). At the same time, evidence suggests that the relationship between ICT adoption and fraud outcomes is not straightforwardly protective; certain ICT-enabled channels have been associated with increased fraud exposure even as others reduce it, depending on the specific technology and channel involved (Awotomilusi & Ajoloko, 2022). Furthermore, weak internal controls, inadequate regulatory enforcement, and poor staff remuneration continue to motivate fraud even where ICT systems are in place (Oyelade, 2024; Ogunyemi, 2024). This raises the central problem this study seeks to address: how effectively can ICT be deployed to detect and minimize fraud within a Nigerian deposit money bank, given the simultaneous influence of staff motivation, regulatory adequacy, and institutional controls?

1.3 RESEARCH QUESTIONS

1. How has the introduction of ICT into the banking industry affected the incidence of fraud?

2. Does lack of staff motivation contribute to the incidence of fraud in First Bank of Nigeria?

3. Are Nigerian banking laws adequate for fraud control in Nigerian banks?

4. Do poor salaries and inadequate working conditions induce bank staff to commit fraud?

5. How effective is information and communication technology in the detection of fraud in Nigerian banks?

1.4 OBJECTIVES OF THE STUDY

The main aim of this study is to determine practical means of detecting fraud incidence in Nigerian banks with the aid of information and communication technology. The specific objectives are:

1. To investigate whether the introduction of ICT into the banking industry has reduced the incidence of fraud.

2. To investigate whether lack of staff motivation contributes to the incidence of fraud in First Bank of Nigeria.

3. To investigate whether Nigerian banking laws are adequate for fraud control.

4. To determine whether poor salaries and inadequate working conditions induce bank staff to commit fraud.

5. To evaluate the effectiveness of information and communication technology in fraud detection.

1.5 HYPOTHESES OF THE STUDY

1. H₀: The introduction of ICT into the banking industry has not reduced the incidence of fraud in Nigerian banks.

2. H₀: Lack of staff motivation has no significant effect on the incidence of fraud in First Bank of Nigeria.

3. H₀: Nigerian banking laws are not adequate for fraud control in banks.

1.6 SCOPE OF THE STUDY

The research covers First Bank of Nigeria Plc within Enugu metropolis. It examines the number and frequency of fraud cases perpetrated within the bank, the effects of such fraud, the persons typically involved, the underlying causes, and the level of effectiveness of the ICT systems employed in fraud detection.

1.7 LIMITATIONS OF THE STUDY

The main limitations of this study include the uncooperative attitude of some bank staff approached for information, time constraints, and financial limitations, all of which affected the volume and depth of information available for analysis.

1.8 SIGNIFICANCE OF THE STUDY

This study is of value to the banking industry generally, and to First Bank of Nigeria specifically, by exposing weaknesses that enable fraud and informing management decisions on ICT deployment. It also serves as a reference resource for future researchers examining fraud detection within Nigerian financial institutions.

1.9 OVERVIEW OF FIRST BANK OF NIGERIA PLC

First Bank of Nigeria Plc traces its origins to the Bank of British West Africa, established in 1894, making it the oldest surviving financial institution in Nigeria. It progressed through several name changes, including Bank of West Africa (1957) and Standard Bank of Nigeria (1969), before adopting its current name, First Bank of Nigeria, in 1979 following the reduction of Standard Chartered's majority stake. The bank has since expanded internationally, including a UK subsidiary, FBN Bank (UK), and representative offices in South Africa and China, and remains one of Nigeria's largest and most systemically significant deposit money banks.

1.10 DEFINITION OF TERMS

Bank: An institution licensed to carry on banking business, including commercial banking, acceptance houses, discount houses, and merchant banking, as defined under Nigerian banking legislation.

Banking: The business of receiving deposits, granting loans, discounting bills and cheques, and dealing in securities on behalf of customers.

Fraud: An intentional act of deception carried out against a financial institution or individual for unlawful financial gain (Al Hattali et al., as cited in MDPI, 2023).

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Alaba, J. S., Ahmed, S. J., Farida, A. P., & Oluwatosin, O. V. (2025). Adoption of AI-driven fraud detection system in the Nigerian banking sector: An analysis of cost, compliance, and competency. Economic Review of Nepal, 8(1), 16–33. https://doi.org/10.3126/ern.v8i1.80740

Al Hattali, S. S., Hussain, S. M., Frank, A., et al. (2023). Application of artificial intelligence for fraudulent banking operations recognition. Big Data and Cognitive Computing, 7(2), 93. https://www.mdpi.com/2504-2289/7/2/93

Awotomilusi, N. S., & Ajoloko, O. M. (2022). Information and communication technology and fraud cases of listed deposit money banks in Nigeria. Multidisciplinary Journal of Management Sciences, 4(2), 55–64. https://www.afarng.org

Fatoki, J. O. (2023). The influence of cyber security on financial fraud in the Nigerian banking industry. ResearchGate. https://www.researchgate.net/publication/373513359

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Oyelade, A. (2024). Frauds and forgeries in Nigerian banking institutions: Implications for banking regulations and the law. International Journal of Economics, Business and Social Science Research, 8(4), 106–124. https://ijebssr.com/frauds-and-forgeries-in-nigerian-banking-institutions-implications-for-banking-regulations-and-the-law/

Tanko, B. (2024). Staffing dichotomy: Labour casualisation and organisational conflict in Nigerian banks. International Journal of Intellectual Discourse, 7(2), 1–18. https://www.researchgate.net/publication/381610922

Uche, P. (2026). Cyber fraud in Nigerian banks: Trends, regulatory gaps, and mitigation strategies (2020–2025). Engineering and Technology Journal. https://everant.org/index.php/etj/article/view/2468