Abstract
This study examines e-fraud and bank performance: empirical evidence from Nigeria. Expo facto research design was used while time series data for the period of ten (10) years sourced from Central Bank of Nigeria (CBN) statistical Bulletin. Unit root test and correlation matrix was used as a diagnostic tests. The Augmented Dickey Fuller (ADF) test is used to test for stationarity. The results of the stationarity or unit root test show that all the variables, return on equity (ROE), Automated Teller Machine Fraud (ATF) and Online Fraud (OLF) have unit roots and are only stationary at first difference and integrated of order one I (1). The fully modified least squares regression (FMOLS) is used for the analysis. The result of the study indicates that both variables, online fraud, (OLF) and ATM fraud (ATF) show negative effect on bank performance proxied in Nigeria in line with a priori expectation. In order words, fraud and fraudulent activities impede on the profitability of the banks. Based on the results obtained from the regression and the analysis conducted, the study recommends among others that bank managers should strengthen their internal control systems at all times. The regulatory authorities should be up and doing concerning their supervisory functions. Appropriate disciplinary measures should be taken against culprits of e-frauds so as deter others with such intentions. Also, banks should hold regular trainings for their Information Technology staff to counter the activities of fraudsters that use electronic means to commit fraud.
Highlights
Apart from individuals, corporate organisations and bank clients are all involved in bank frauds within the Nigeria Banking system
It is pertinent to note that bank frauds have far reaching effects on owners, managers and stockholder of the concerned banks economy wide resulting sometimes to the ugly incidence of banks distress, closures, and sometimes, mergers and acquisitions such a crisis situation will have an adverse effect on the traditional role of commercial banks as financial intermediaries
The specific objectives are to ascertain the effect of automated teller machine (ATM) fraud on profit in Nigeria banking industry
Summary
Conceptual Review The concept of Fraud Fraud can be define as a predetermined as well as planned tricky process or device usually undertaken by a person or a group of persons with the sole aim of cheating another person or organisation to gain ill-gotten advantage which would not have accrued in the absence of such deceptive procedure (Nwaze, 2012). The theory online questionnaire to access a population of 68 employees explains the fact that the culprits deliberate after the act to representing 33% of the population, the study revealed that assist in its omission Greed motivates this type of fraud to fraud in commercial Bank of Africa was given a very high exploit any opportunities available. Chiezey and Onu (2013) in their study used multiple regression analysis to ascertain the impact of fraud and fraudulent practices on bank performance in Nigeria from 2001 to 2011 They found that the percentage of mobilized funds lost to fraud was highest between 2001 and 2005 but which was significant reduced between 2006 and 2011. Result of the study shows that, there is a significant relationship between banks profit and total amount of funds involved in fraud
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