Fraud Management in the Financial Service Sector: Evidences from Listed Deposit Money Banks in Nigeria

Abstract

This study examined fraud management and financial performance of listed deposit money banks (DMBs) in Nigeria within the period 2015 - 2024. The objectives of the study were to examine the effect of volume of reported fraud; ascertain the effectiveness of internal control mechanisms and corporate governance practices; and determine the effect of number of fraud cases on financial performance of listed deposit money banks. Using secondary data sourced from Central Bank of Nigeria (CBN) statistical bulletin and annual reports and financial statements of selected (Guarantee Trust Bank and Access Bank Plc), the study employed descriptive statistics and Pearson correlation to carry out the analysis. The findings revealed that fraud volume has a statistically significant negative impact on ROA; significant negative relationship was observed between the number of fraud cases and financial performance and corporate governance index demonstrated a positive and significant relationship with performance metric, and a negative relationship with fraud volume and frequency. It was recommended, among others, that banks should invest in technology-driven monitoring systems under policy of segregation of duties.