The Role of Computer in Fraud Selection and Prevention in the Nigerian Commercial Banking Industry

THE ROLE OF COMPUTER IN FRAUD SELECTION AND PREVENTION IN THE NIGERIAN COMMERCIAL BANKING INDUSTRY

Many people in today economic development have discussed a lot concerning the outstanding nature of computer people seen it as just an ordinary machine or gadget while others recognize that though it is a machine but it can handle any instruction feed into it.

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It is on this grouped that debates and discussion abound in the society nowadays especially how a computer can help to detect and prevent fraud in organization especially banking industry. Accounting to E . Inyany a computer scientist with international computer Ltd (TCL) we said computer use help company fixed assets to be properly documented and secured. These ranges from officer furniture and equipment to vehicles, generators etc. wring deletion and prevention of fraud by the use of computer, AJ.Nwachkwu  (1993) said that, timely information about supplies account with then are effective monitored by a the system is so designed that people with little or no knowledge of computer and according cannot conveniently process your account payable. However, a review of literature revealed that no much work of study have been down his topic.

  • COMPUTER IN NIGERIAN

The use of computer is becoming overwhelmingly important in Nigeria. Although statistic on computer uses in Nigeria is still not comprehensive.

The use of computer started s early as 1960 when international computer limited (ICL) installed its branch at the Alimadu Bello university Zaria to assist in teaching and research especially in areas of mathematics, statistics and Agriculture.

According to a computer scientific Chiujike Onouo “ computer is gradually taking overall spheres of human endeavor and can perform any function if uses accurate, computer and factual’ most important use of computer are being put in the areas of uses of computer are being put in the areas of financial planning and management. Apart from financial and project management, computers are be coming more relevant in other areas of business like payroll preparation, recognition. In industries industrialized in some countries, computer payrolls and inventory control system have become a routine.,

In the field of education there are computer teaching aids computer aided instruction through which lecture could lest and teach student and allow them to work at their place. Computer help denationalize examination.

  • THE USE AND TRENDS OF COMPUTER IN NIGERIA

Computer users in Nigeria are daily being bombarded with Innovations in computer hardware and are also changing their tools to enhance efficiency brought about by new development. Unit recently the mainframe and the mini computers were be most common, but the emergency of mirco computer (personal computer) has change all that. The main frame are the earliest innovations, capacity for both storag and processing, white the mini computers are the medium version of the mainframes. They are equally powerful, the mainframes and mini computers are mostly used in big establishment like banks, the Nigeria National Petroleum Corporation (NNPC) Gulfou and others. Micro computers, on the other hand, come in small frame, sometimes not large than notebook. They are very light and can be placed on disks (desk tops) and also on laps or floor standing Micro computer provide a close person machine relationship and give a strong sense of autonomy to its users. For this reasons, they are often called personal computer. Apart from use, they have become instruments of entertainment, especially for video games. Its high performance and its ability to readily interpret already existing system offset, its disadvantages in terms of limited capacity, especially for dull – blow computing environment Micro computer also have additional advantage of being cheaper and they suit outdoor assignments better because of their small frames.

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Personal computers have site advantage over the mainframe and minicomputers. When installing mainframe you need to prepare the site provide, for large space and environment  is dust proof and continence encourage and ensure specified temperature level. But with micro computers such preparations are not necessary.

A pure mini computer manufactures like wang prime computer, Data General and  Digital equipment corporation are currently striving for better market niches. Wang has abandoned its mini computer business and it currently hanging its survival to build up its activities into pure mini – computer manufacturing has now diversified into mainframe and micro based system.

Adekunle Ajobaje, systems marketing manager, Data science Nigeria Ltd. Gives an insight into why green market for everybody because it is something that a person can decide to buy and use, while the mainframe are restricted in the use corporate organization of can be seen that Nigeria is going computer wise.

 

  • FRAUD AND BANKING SERVICES

Fraud and forgeries in banks have not become incessant but have also been on the increase in recent years. Although fraud in banks is a global phenomenon, the growth in Nigeria has become astounding. The 1993 Nigeria Deposit insurance corporation (NDIC) annual reports, for instance presented a disturbing picture of rising trend of involved in Banks, from 357.93 million in 1992, the amount involved in fraud in commercial bank run to 1,377.15 million in 1993 where the actual expected was rose from 64.8 million to 2410 million in both years respectively.

Bank fraud means a conscious  or deliberate effort aimed at obtaining unlawful financial advantage at the detriment of another person. Fraud also means money or obtain goods. This is the reminiscent of the topic of worry to very body is this country. Alshi, (1993) defined fraud as “act dishonesty deceit and imposture he said that according to Kirk Patrick (1985) a person who pretends to be something that he is not is (I) a fraud ,a since a deceptive or   tricks a (ii) cheat and a swindle by extension fraud will include embezzlement, theft or any attempt to steal or unlawfully obtain, misuse or harm the assets of the bank.

It is now obvious that banking services are degenerating in quality as nether customer or staff  is tempted that fraud and forgeries which are some of the causes distress of banks, have become rampart in the banking industries in Nigeria , millions of either account holder in collaboration with bank officials.

  • NATURE AND TYPES FO BANK FRAUD

Bank in Nigeria have been quite sometime, the central of public attention especially in the area of frauds. This very disturbing to know the frauds have been an academic feature of the banking institution. They deplete share holders and constitute a lose to bank customers there by further ending public confidence in the banking system.

Recently, the incident of fraud have got the attention of all and sundry and have been the focus of government which ensures fair and efficient processing of results. In Nigeria the major government pronouncement on the use of computer was December 1987 Jubril Adamu committee was pid in place to devise clear strategies and technologies to be used by Federal and state government well as other proprietors in introducing computer education our schools, bearing in mind that the prime objective was to bring about a computer literate society this country by the middle of 1990’s .

Since then the practical efforts have been taken to propagate the use of computer, even in our government ministries and agencies for instance computer is currently used in the Federal ministry of Agriculture established and compute Centre and resource library under its Agriculture Data Bank. Also, the Nigeria Army has commissioned a multi – million naria computer and microfilm system to enhance its operations.

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The industrial development Centre of the old Anambra state university, Enugu blazes the trail in development of computer hand and software as well as computer education in Nigeria. The Centre development its own series of computer system  ASUTECH SERIES 800, 801 and 8000 which was tested and found to be good as most of the leading computer systems in the market, the inputs into its computers series are of local fabrications, excepts for the integrated circuit chigs which were imported.

Oliver mobisson, a director in one computer Centre sees the acquisition of computer technology as will enable Nigeria and Africa by pass various stages of development.

For journalist one the most advance technique for writing and transmitting stores sis through micro computer and satellite data transmission an example is mascot Norma, it is ready tool and revolution in the area of mobile communication. The machine sends it information via satellite into data or tele network of the recipient country. From there information is fed into computer back at the head officer.

Computer also comes in area like nation identification schemes and population census where workable data base is required. This assists in creating a common file where data from all centres will be stored to falcate easy updating and manipulation attention fraud in banks very widely in nature, character and method of preparation. In general, it may be classified into two viz.

  • Perpetrators
  • Method used.

On the basic of perpetrators, there are three broad categories.

Internal (b  External © mixed

Internal perpetrators of fraud relates to those committed by members of the staff in the bank. External perpetrators of fraud involves out sides collecting with  the insiders / staff it is of importance for bank management to identify the category under which various frauds in the bank falls.

A clear knowledge of the best solution. Below, the contained in bank administration (1980) in fraud prevention series.

ADVANCED FEE FRAUD (419)

          This involves on agent approving a bank company or an individual with an offer to long term. The purposed source of such funds is not specifically identified as the only way to have access to its through the agent who must receive a fee or commission in advance as soon as the agent collects the fee, he disappear into thing air and  the facility or loan never comes through. Any bank desperate for fund to bid for foreign exchange can easily fall victim to this types of fraud. When the deal fails and fee paid in advance are lost these victims are not likely to report the losses to the police or authorities.

 

  • ACCOUNT OPEING FRAUD

This involves the deposit and subsequent cashing of fraudulent cheque. It usually starts when a person not know to the bank as to open a transaction account such as current or saving account with false identification but know to the bank. The person opens the account with as small a initial deposit days the cash . Generally, within a few days, the person will deposit a number of bad cheque and obtain cash in return either by cashing the fraudulent items out rightly or by withdrawing cash as soon as affordable fund is available . The bad cheque may be large overdraft drawn on other bankers on bank account that  are closed or never existed envelopes deposed in automated machine.

  • CHEQUE FRAUD

The use of cheque as a means of paying financial obligations is an essential feature of modern economy. Chapter fraud is now very common involving million of Naira annually. Common type of cheque are  personal business, government,  travelers certified draft,  and counter cheque with each having its own characteristic and vulnerabilities for fraudulent use. The most common cheque fraud involves cheque that are stolen forged counter fit or altered.

  • COUNTERFEIT SECURITIES
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As in counterfeiting of money , counterfeiting of commercial financial instrument is one of the oldest form of crime. Modern photographic and printing equipment has greatly aided the criminal in reproducing good qualify forged instruments . The genuine document that are capied, forged or altered as to amount, pay out data payee or terms of payment. A common method is to present the counterfeit stock or bond as a collateral from may be presented to a bank for redemption. The financial instrument are found to be counterfeit.

  • CHEQUE KITING

Kiting is defined by the united state controller of currency policy guideline for National Bank Directors as a method whereby a deposit utilize the time required for cheque to clear to obtain an authorized loan with out any interest charged. The goal of cheque Kite, may be to use these uncollected funds interest free for a short time to over come a temporary cash shorting or withdraw the fund permanently for personal; use. Uncollected funds refers to cheque lodgment acceptance until the institution on which such cheque is guarantee acceptance until the institution on which such cheque is drawn has determined the fund is available to cover that item. Competion among banks in the are of deregulation encourages banks to make. Funs available before actual collection of customers especially business account.

TEAMING AND LADING

This means the removal of cash collected by cashier from their customers. This leads to declaration of false shortage.

MANIPULATION OF DORMANT ACCOUNTS

          Accounts that are not operated for reasonable length of time is referred to as dormant. Some fraudulent staff of bank sometimes raise vouchers with forged signature

  • REMEDIES

The measures to the problem of fraud detection and prevention forgery has been one the problems which every economy faces especially banking industries. It is of this reason that I want to give possible solutions to the problem of fraud, especially low to the detect and prevent it. Employment adequate computer staff operators. The banks should try to employ adequate staff operators who can use computer adequately to detect fund control fraud.

  1. Constant inspections banks management should adopt constant inspection of dormant account true the use of computer activities Nigeria commercial banks.
  • Fraud ducting and preventing equipment Banks also should use some electrode garggates to control the assurance e of fraudulent activities the banking industry . Such equipment  can be inform of bank caramels .
  1. Banking education. Banks also should adequate their staff every well an how to use computer to be able to dictate and prevent fraud through the use of computer.
  2. Summers: Bank should also organize seuniners to their staff and customer on the implication of in fraudulent activity and this will help them to civil this problem.

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