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Digital Payment Fraud and Bank Fragility: Evidence from Deposit Money Banks in Nigeria

Author

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  • Folami, Rahmon A.
  • Yinusa, Ganiu O.
  • Toriola, Anu K.

Abstract

Digital payment is revolutionising the banking sector globally, offering real time, convenient and efficient services to customers. However, this transformation is also creating new challenges including digital payment fraud. This study investigated the relationship between digital payment fraud and bank fragility in Nigeria's deposit money banks. The study used the Panel Fully Modified Least Squares (FMOLS) method to analyse the data collected from the annual report and statement of accounts of a sample of fourteen deposit money banks over the period of ten years (2014 to 2023). The findings revealed that digital payment fraud exerts a significant effect on bank fragility, with implications for profitability returns. Additionally, the study highlighted the importance of bank size as a mitigating factor in reducing fragility and enhancing financial performance. These findings contribute to the understanding of the risks associated with digital payment fraud and provide insights for policymakers and practitioners in addressing this growing concern in the Nigerian banking sector. The study recommended the need for banks to prioritise and strengthen Cybersecurity measures and implement effective fraud detection systems to mitigate the risks associated with digital payment fraud. `

Suggested Citation

  • Folami, Rahmon A. & Yinusa, Ganiu O. & Toriola, Anu K., 2024. "Digital Payment Fraud and Bank Fragility: Evidence from Deposit Money Banks in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 12(4).
    • Handle: RePEc:ags:afjecr:362925
    DOI: 10.22004/ag.econ.362925
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    References listed on IDEAS

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    1. Amme I. Offiong & Chris O. Udoka & Bassey Ina Ibor, 2016. "Frauds in the Nigerian Banking Sector: A Factor-Analytic Investigation," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 5(1), pages 55-68.
    2. Beck, Thorsten & Chen, Tao & Lin, Chen & Song, Frank M., 2016. "Financial innovation: The bright and the dark sides," Journal of Banking & Finance, Elsevier, vol. 72(C), pages 28-51.
    3. Luigi Wewege & Jeo Lee & Michael C. Thomsett, 2020. "Disruptions and Digital Banking Trends," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(6), pages 1-2.
    4. Rabi’u Abdullahi & Noorhayati Mansor, 2015. "Fraud Triangle Theory and Fraud Diamond Theory. Understanding the Convergent and Divergent For Future Research," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(4), pages 38-45, October.
    5. Bamidele M. ILO & Rahmon, A. FOLAMI & Yusuf, A. SOYEBO & Godwin E. OYEDOKUN, 2022. "Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 4(1), pages 17-38.
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