INFORMATION AND COMMUNICATION TECHNOLOGY AND FRAUD: EVIDENCE FROM NIGERIAN BANKS

ABSTRACT

This study examines the impact of Information and Communication Technology (ICT) on fraud in Nigerian Banks. The issue of fraud in the banking industry is really not a new problem but the full deployment of ICT in banking operations is relatively new. With 2005 assumed as the year when banks reasonably deployed ICT in their operations, and relying on a 14-year (1999 to 2012) time series data, the study examined the issue of fraud Pre-ICT (from 1999 to 2005) and Post-ICT (from 2006-2012). The study relied mainly on secondary data for the period under consideration. Using Microsoft Word and EXCEL software Packages, Descriptive Statistics, Correlation Analysis, Analysis of Variance (ANOVA), and Regression Analysis were employed in the study. Five hypotheses were tested to enable us draw a conclusion. The study discovered that increasing use of ICT appears to be associated with increasing amounts of fraud in the banking sector, and that there was significant difference in the amount of fraud involving employees (non-management staff) before and after the deployment of ICT. It is therefore recommended that in a bid to reduce this ugly development to the barest minimum, policy makers in the banking industry should strengthen internal audit and internal control functions and enhance corporate governance ethics among the executive level of the staff. It is further recommended that stakeholders in the sector should sharpen their fraud detection capabilities.