It is universally accepted that for the smooth functioning of a money market and economic growth of a country, an efficient and good banking system is a must.
Modern technology has taken the world by storm in recent decades. Particularly, the advent of the computer has completely revolutionized the way people live, work and play. Computers have affected businesses in numerous ways, allowing them to run more efficiently. However, there is a dark side to computers when individuals use them to lash out malicious assaults. These assaults may include fraud; identify theft, hacking, embezzlement and a wide array of other activities.
Fraud can be defined as all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get on advantage over another by false suggestions or suppression of the truth. It includes all surprises, tricks, cunning or dissembling and any unfair way which another is cheated. Information fraud denotes any fraud committed through any of the
information gadgets such as computers, telephone, fax etc. The declining level of business integrity in the banking industry may threaten the operations of the system in the post consolidation era. The volume of frauds and forgeries in Nigerian banks rose sharply by 107 cases (48 %) in the second quarter to 329, up from 222 in the previous quarter. The total amount involved in fraud and forgeries over the period was a whopping N1 .47bn, up by 25.6% from N 1.1 5bn in the first quarter of the year. Whether simple or advanced, data analysis provides many benefits in the prevention and detection of fraud. While occupational fraud takes various forms, the result is always the same: the numbers generated by fraud cannot hold up to the unfailing logic of the accounting equation. For example, if executives add false sales and account receivable to increase the organization’s revenue, profits and cash will be out of the kilter. The advancement of technology has allowed this “accounting equation” to be systemized into computer logic and applied to company data. Results of this logic could take the form of a simple matching of the human resource file to the accounts payable vendor master file. On the other side of the coin, it could be an advanced neural network application focused on detecting money laundering schemes.
Computerization of banking operations enables the systematic transfer of all relevant information into the computer logic. This enables information to the accessed at the touch of a button. Transactions are also concluded on-line i.e. as soon customer approaches the bank for a transaction; it is executed and concluded on the spot. It has also greatly reduced the long queues and waiting time of carrying out business transactions in banks.