Every economy relies on the banking sector to boost economic growth and development because of its intermediary role. However, the Nigerian banking sector has been plagued with the risk of fraud which has led to the loss of huge amounts of money annually. This challenge has put pressure on the management of banks on how best to curb the fraud scourge. Although several studies which relied majorly on the traditional method of fraud management have been carried out on how to reduce the frequent occurrence of fraud in the banking sector, the problem persists. Therefore, this study took a different approach to examine the role of information security management on fraud risk management in Deposit Money Banks (DMBs) in Nigeria. The study employed a survey research design. The population of the study was 1,030 staff of the Internal Control, Internal Audit and Information Technology departments of DMBs in Nigeria. A sample size of 288 was determined using Taro Yamane’s formula. The respondents were purposively selected from 12 listed banks as at 31st January 2024 due to the role they play in fraud risk management. A structured and validated questionnaire was distributed and 99.7% response rate was achieved. Cronbach’s alpha reliability coefficients for the constructs ranged from 0.864 to 0.952. Descriptive and inferential (multiple regression) statistics were used to analyze the data. Utilizing a regression model, the research examines three key proxies of information security management: Application Security Control (ASC), Access/Authentication Control (AAC), and Network Security Control (NSC) and one proxy (Fraud risk governance - FRG) for fraud risk management The model reveals that both ASC and AAC have significant positive effects on FRG, with coefficients of 0.216 and 0.247, respectively, while NSC, with a coefficient of 0.080, does not significantly influence FRG. The model's adjusted 𝑅2 value of 18.9% indicates that these controls collectively explain a modest portion of the variability in FRG, suggesting the presence of other influential factors. The findings highlight that strengthening ASC and AAC can substantially enhance fraud risk governance in Nigerian DMBs, whereas NSC requires further investigation to understand its role. The significance of the overall model, supported by an F-statistic of 21.939 (p 0.05), underscores the importance of integrated information security management in mitigating fraud risks. Additionally, the study aligns with existing literature advocating for the integration of advanced information security management and traditional fraud management methods. The study recommended that the board of directors of DMBs as part of its oversight function should periodically review the overall fraud risk management framework of the bank to ensure it is current, adequate and effective.
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