Fraud Risk Management and Performance of Deposit Money Banks: A Survey of First Bank of Nigeria Plc.

Abstract:

The study examined fraud risk management and performance of deposit money banks, surveying First Bank of Nigeria Plc. The study population comprised of major branches of First Bank of Nigeria PLC, but 10 branches were randomly selected and used for the study with service staff from each branch making up an effective sample of 40. Pearson Moment Correlation Statistic was used to determine the correlation between the variables. Multiple Regression Statistic was deployed in analysing the relationship between the variables; Preventive Fraud Risk Management (PFRM), Detective Fraud Risk Management (DFRM) and Responsive Fraud Risk Management (RFRM) and performance (ROA). The findings revealed that PFRM and DFRM have significant relationships with ROA, while RFRM has an inverse relationship with ROA. The study recommended that top management of banks should adopt a multi-dimensional strategy in combating and mitigating fraud. Due to the peculiarity of the industry, hand-on policies and practices such as fraud risk assessment programs, fraud risk awareness training, proactive data analysis, automation of transactions with security encryption, whistle blowing, anti-fraud policy and frequent review of ineffective internal controls should be carried out at regular intervals to mitigate incessant bank fraud.