Nigerian banks
From Benjamin A Ameh, Lagos
The rise in availability of alternative channels can also be leveraged upon to reduce the number of otherwise unprofitable traditional branches.
The Managing Director and Chief Executive, Unity Bank plc, Henry Semenitari while addressing the banking industry stakeholders at a forum in Lagos saying leading practice has shown that with the automation of processes forward looking organisations are adopting a lean structure as a tool to achieve operational efficiency
According to Unity bank boss in the process of this adoption the cost of funds will have to be streamlined to ensure that the funding mix is made up of cheap and sustainable funds.
Speaking on the theme: “operational efficiency: a panacea to the survival of an organisation,” at the 30th quarterly meeting of Committee of Chief Internal Auditors of Banks in Nigeria, Semenitari said in implementing an efficiently driven business model, re-thinking the cost structure was a key area that the banks must consider.
He pointed out that building of physical branches usually require huge capital outlay that impact on the bank’s balance sheet and provides limited transaction options to customers.
“However, investment in alternative channels driven by information technology also requires huge initial cost, but provides significant cost savings in the long term and massive convenience to customers as it provides multiple transaction options and ease of access.
Its devastating effect manifests itself in the deteriorating balance sheet of banks as well as economic backwardness of third-world countries including Nigeria,” he said.
“Fraud is an epidemic that has eaten deep into the banking sector and if not urgently check will have negative impact on the Nigerian economy.
According to the Financial Institutions Training Centre (FITC) report released recently, Frauds and Forgeries in Banks (January–September 2014) stood at a total of 8,502 cases were reported.
The total amount of money involved was N23.34 billion, out of which N3.01 billion was actually lost while N20.33 billion of the total amount involved was recovered through the collective efforts of banks’ internal and external control techniques as well as intervention of the law enforcement and anti-graft agencies,
The report is based on 66 returns received from 22 De- posit Money Banks (DMBs) – ranging from fraudulent in ATM withdrawals, computer fraud, fraudulent withdrawals, suppression of entries and opening/operating fraudulent accounts.
He therefore charged auditors to focus on fraud prevention in the financial services sector as over the years, it was established that substantial part of bank’s revenue was lost to fraud with no single bank spared.
