Fraud Prevention and Internal Control Mechanisms in Selected Banks in Nigeria

The internal control procedures and policies of two Nigerian commercial banks were investigated in this research. Semi-structured interviews were used in the study to collect data using a qualitative methodology. Data was gathered from employees of the chosen banks’ internal control units using a purposive sample technique. Thematic analysis was utilised to examine the gathered data and it was demonstrated from the findings that the internal control methods that banks used to identify fraud were centered on setting up a control environment and identifying, analyzing, and managing risks from both internal and external sources. The investigation showed also that Nigerian banks’ use of a number of internal control mechanisms to thwart fraud has increased, particularly in the areas of authorizations, approvals, reconciliations, reviews of operational performance, asset security, division of labor, an enhanced information system, and a regular assessment of the internal oversight structures already in place. Additionally, the study discovered that since Nigeria implemented the cashless policy in 2014, the introduction of technology advancements into the banking industry has contributed, if marginally, to the improvement in the prompt detection and effective prevention of fraud. The internal control procedures (ICPs) of most banks in Nigeria have effectively reduced bank fraud from external sources. The research comes to the conclusion that Nigerian banks must prioritize protecting the data of their clients and strengthening their security systems by adhering to international standards and recommended practices if they want ICPs to be successful in detecting and preventing fraud.