The Effect of Electronic Banking on Fraud Reduction in Banks

The Effect of Electronic Banking on Fraud Reduction in Banks (A Case Study of Access Bank Plc)

The Nigeria economy has gone through different evolutionary stages to control the supply of money created. The statute of the central Bank of Nigeria was passed in 1958, on that day and for subsequent periods (determined by CBN) the successful exchanges with the legal tender of the banks in the denomination of pounds, sterling and pennies.

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The financial system is made up of the central banks, commercial banks, discount houses pension and provident funds, insurance companies housing corporation etc. financial market includes the money markets and capital markets. These are markets where financial market include the money markets and capital market. These are markets where financial transaction between lenders and borrowing are carried out. According to Kanu (2003) they are financial intermediaries in this market, securities are sold on long term and short term basis.

With the development of the Nigerian banking sector over the years, there has been an over increasing wave of problem, particularly that of fraud. The problem has however, taken a more serious dimension in the past 16 years. The problem of fraud has now become a more prominent issue in virtually every conference estate seminar or public lecture related to the banking sector particularly, and the Nigerian economy as a whole. The effect and consequences of fraud on banks have made it occupy the priority position on the problems facing the banking industry. Banks find it hard to perform certain services for customers which they would otherwise have performed, bank fraud not taken the epidemic dimension, which it has now taken. This deprive them of huge revenue from commission and services charges a rising from the transaction such as using banks draft carrying but money transfer for their lost etc. the financial sector is one of the most imported sector of an economy, which makes monetary contribution to the working of the economic system (mbat 1998:28)


According to Ifegwu (2003) Access bank plc is one of the solid banks in Nigeria today. This bank came up during the early 80’s. as at year 2003, Access Bank plc, had about 40 branches in the Nigeria. The solid growth rate of the bank has increased recently. The mission Access Bank plc is build a foremost financial service organization characterized by a determined focus on customers professionalism, integrity and a commitment for destruction in the conduct of its business.

This is an organization which provide staff opportunity of fulfillment their practice. A market driven organization which remains conscious of increasing sophisticated competition. Due to the bank various expansion programme and the need to keep upgrading its machines in the area of information technology. The banks made necessary investment in the maintaining contemporary information technology by acquisition of brand new back offs site server, which has sustained its leading position in banking technology. The bank also continued to invest in new vehicle for its personnel’s to improve on its marketing device further investment were opened. The bank intension to carry on fulfillment objectives as stalled in its memorandum and articles in the banking industry have for a long time started since the 90’s the bank have been online  or electronic banking facilitates easy transaction in the bank (Ayonale 1989). In area of electronic banking, the technology banking unit drives the technology initiation of the bank. The unit was established to develop and drive the bank various technology based products such as telephone banking, internet banking, such as telephone banking, internet banking, online shopping, provisions of ATM’s and effective payment, systems build and update the bank’s website as well as take advantages of any new and emerging technology in improving on the banks system.


According to report in IMF quarterly (Sept, 2002) banks can now offer their services more efficient, and substantially at a lower cost through E-banking operations. Electronic banking offers such benefit to banking industry Nigeria.

  1. Reduction in wasting time.
  2. Provision of efficient bank services.
  3. Reduction in the cost of obtaining bank services.
  4. Possibility of comparing banks services.
  5. Increase competition among banks.
  6. Opportunity to open new markets.
  7. It reduces a lot of paper work in the process of cheques or money transfer.
  8. It has led to the increasing design and sophistication of the computer technology.


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In Nigeria today, the banking sector is  on area of the economy that has experienced the most extensive application of computers even through computerized of computer application her is still at a low level when compared to advanced countries (Andrew 2004:11). Going to the recent reports (the analysis of exports and the cause expected to rise, which brings about the tendency to draw a banking line between the increasing use of computer in the banking operation of Nigeria. This is based on the stand point that computers are basically idiotic machines and can be easily manipulated to the stand point that did the special and accuracy of these crime computer can be manipulated to insert fixation entries, credit accounts with funds not paid or undue effect and aid customers to claim more than their cash balances. There are many atrocities the computer can be instructed to commit by simple manipulation. Although computer be used in committing crimes, it is of more use in bank fraud because fraudsters are more interested in money.

Crime committed through the manipulation of computers cannot be easily detected as continuous evaluation and other control measures may be lacking.

According to NDIC (1999) a total of eight hundred and four (N 804) million was lost in fraud in 1999 as against one hundred and five million (N 105) recorded in 1998. Further analysis indicates that the 1999 figure is on increase of sixty – six percent 166% over that of the previous fears.


Fraud in bank cannot be avoided or stopped, but there are several means the bank can adopt maintain the level of fraud in banks. In other words, Access Bank plc in their cover policies, which act as or check on the bank against fraud, these include. Internal control units: Internal control mechanism: According  to Ifegwu(2002) the primary responsibility of the internal control units is to ensure  that the business is carried in an orderly and efficient manner within prescribed policies and guidelines-internal and external. The control processes in financial institution cannot be over-emphasized especially in the era of increasing fraud irregularities sub-optional practices. The major reforms earlier out the previous financial year were also conclude this year. The purpose of the restructuring was to activate the relevance of internal control and ascertain its flexible systematic integration. As “quality of earning” remains our watchword, processes were modified to promote all encompassing improvement in bank wide operation. The staff structure was enhanced numerically and quantitatively through refined living and training exercise to accomplish the task of system re-engineering. Through the function of the unit, we were able to accomplish the following:

  • Protection of financial assets of the customer.
  • Improvement in customer service delivery
  • Strengthening of responsibility accounting procedure

Financial Control: The financial control unit, observed by Emefine (2004) plays the role of a catalyst unit, which on a consistent basis drives the entire members of the organization to achieving their specific business goals, its functions are strategic to the efficient management of the entire banks. The unit present on regard basis of financial information necessary for decision making while being charged with the responsibility of rendering vital statutory returns. Furthermore, coordinate both the external audit and tax operations of the bank and supplies management with timely financial information for decision making. In addition, the unit also engages in advisory, services to marketing, operation and even other support units of the banks.

Technology: The technology banking unit dries the technology intimates of banks. The unit was established, developed and drive the bank various technology based product such as telephone. Banking internet banking, instant cash transfer (1-cash) etc. the bank has witnessed a tremendous customer patronage on unparallel internet, telephone and instant cash transfer (1-cash) service, customer can have an efficient, fast and secure on line access to their account 24 hours a day and the following can be accomplished

  • View balance on their accounts.
  • Transfer funds from one account to another
  • Order new cheques booklet.

Transaction Services: According to Ifegwu (2004) the bank is also developing a scheme that would allow customers to pay for purchase at designate merchants outlets with their cheques without hindrance. The project pay to cheques guarantee scheme whereby customer via an automated process make their cheques. The newest project within the period is the GSM operation. The bank strategically aligned itself with major GSM operators, MTN, GLO and NITEL in conjunction with their associated Company, Access investment and securities limited to deliver superior and value added services to their customers.


According to Thornton and white (2001) electronic banking or online banking is now the most popular from of E-commerce for millions of American. Most main stream banks and even credits host of  products and service over internet investment by banks in secure transaction technologies and robust IT practices has made electronic banking has contributed toward fraud reduction in banks through the following.

  • TIME SAVING: According to How craft et al (2002), time saved from traveling to brick and mortar bank branches for conducting banking transaction and other key banking activities can be used productively for other pursuit. It also reduces the waiting time of customers in front of banking hall and also minimizes the queues in the bank.
  • ALTERNATIVE RATES AND INCENTIVES: Banks offer attractive interest rates for certificate of (CDS) that are opened online. Many other also offer incentives for opening accounts online.
  • According to Thornton and white (2001) electronic banking provides customers within 24 hours of the day seven days of the week.
  • Electronic Banking provides partly transfer of funds easy shopping with on line payments anywhere in the world without Master-card.
  • Consolidated Portfolio Inter-Face: Most be offer a seamless and consolidated inter-face account mortgages, investment portfolio and other financial assets.
  • Convenience: According to Mouticio et al (2000) with the help of electronic banking, we can shop, pay balls, buy items at auction and transfer money from anywhere at anytime.
  • Electronic banking also increases competition with in the banking system and also from non bank financial institution.


One of the largest and most diversified finance services institution in Nigeria with one of the network of over 23 branches. Access bank has under score the growing support it is receiving from local and foreign institutions as it drives its strategic intent of being the number one bank in Nigeria.


The following

  • Access Bank plc has introduced another’s innovation into the electronic banking market as customers. Use their e-transact cards to transact banking activities on Access Bank Automated Teller Machine (ATM) which help to fraud reduction in the bank.
  • Access Bank Customers now have the option of using ATMs that are available in all branches of the bank in the country.
  • The banks drive at providing seamless and convenient e-banking services and product to its customers at the comfort of their homes and offices.
  • Electronic Banking Transact is the first online real system that allows account holders to pay for goods and services purchased from merchants, transacts funds to nay bank account, cell phone, playbill, and other products without stress.
  • Access bank has provided largest electronic banking plat from which is created and designed by the bank to deliver services and convient banking services electronically to millions of Nigeria’s under banked. It is the banks strategic vehicle for achieving it bold reduces of bank faced in retail banking vision of delivering banking services.
  • Access provides customers with non stop access to their accounts 24 hours a day seven days a week and party transfer of funds easy shopping with online payments anywhere in the world without cash through. Master Card.
  • Access Bank provides conventional electronic banking product and services to customers in the comfort of their home and offices with the help electronic banking product and services to customers in the comfort of their home and offices with the help of electronic banking their customer can shop, pay bills, buy items at auction and transfer money from any where at any time. will only provide papers as a reference for your research. The papers ordered and produced should be used as a guide or framework for your own paper. It is the aim of to only provide guidance by which the paper should be pursued. We are neither encouraging any form of plagiarism nor are we advocating the use of the papers produced herein for cheating.

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