ELECTRONIC BANKING SERVICES AND FRAUD INCIDENCE AMONG DEPOSIT MONEY BANKS IN NIGERIA

ABSTRACT

This study examines the effect of electronic banking services on fraud incidence among deposit money banks in Nigeria. Fraud in the banks is also considered in terms of the frequency of incidence and the amount involved in the fraud. The specific objectives of the study are to determine the effect of automated teller machines, points of sales, internet banking services, mobile banking services, and real time gross settlements on fraud incidence among deposit money banks in Nigeria. The study employs a disaggregated approach in the evaluation of the relationship using quarterly aggregate data for the 21 deposit money banks for the period 2006 to 2022 which include; descriptive statistics, correlation coefficient, unit root test, granger causality test, optimal lag selection criteria test and co-integration test using Autoregressive Distribution Lag (ARDL) technique to estimate the dynamic relationship (short run and long run) between the variables. The study reveals evidence of a long run relationship among the study variables in the model. A negative relation exists between ATM transactions and fraud incidence. Point of sales banking channel significantly increases fraud in the banking system in Nigeria, thus it has a positive effect on fraud both in the short run and long run. Internet banking has an unequivocal positive impact on fraud in the banks. Mobile banking does not have significant impact on fraud in banks, both in the long run and short run. Also, Real time gross settlements do not have any significant effect on fraud incidence among deposit money banks in Nigeria. An important policy implication is that regulators are therefore encouraged to ensure that both the human and technology component of these channels are streamlined to best practices.