An evaluation of internal enforcement mechanisms on curbing fraudulent activities in banking: a case study of Guaranty Trust Bank
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Background of the Study
Internal enforcement mechanisms are pivotal for curbing fraudulent activities in the banking sector. Guaranty Trust Bank (GTBank) has developed a robust framework that integrates advanced monitoring systems, periodic internal audits, and strict policy adherence to mitigate fraud risks. The bank’s approach includes automated surveillance tools that flag irregular transactions, real‐time data analytics for anomaly detection, and comprehensive staff training on ethical practices (Eze, 2023). This multi-layered system is designed to create a strong deterrent against internal and external fraudulent activities while ensuring that corrective measures are implemented swiftly.
In recent years, increased regulatory scrutiny and the evolution of sophisticated fraud techniques have forced banks to enhance their internal control structures. GTBank’s investment in digital tools has improved the efficiency and accuracy of its enforcement mechanisms. The integration of automated systems with manual oversight allows for continuous monitoring, ensuring that any deviations from standard procedures are promptly addressed (Chinwe, 2024). Moreover, regular compliance audits and whistleblower policies further reinforce the integrity of the bank’s operations, building customer trust and safeguarding the bank’s assets.
Despite these advancements, challenges remain in maintaining uniform enforcement across diverse operational units and branches. The dynamic nature of fraudulent schemes requires that enforcement mechanisms are continually updated and adapted. This study investigates how GTBank’s internal enforcement mechanisms contribute to reducing fraud, examining the balance between technology and human oversight, and the strategies employed to sustain compliance in an evolving risk environment (Ibrahim, 2025).
Statement of the Problem
Even with the sophisticated internal enforcement mechanisms implemented by GTBank, fraudulent activities persist, highlighting gaps that need addressing. One major issue is the inconsistency in enforcement practices across different branches, partly due to integration challenges between new automated systems and older legacy infrastructures (Eze, 2023). This results in delays in fraud detection and uneven application of controls. Additionally, while advanced monitoring tools generate extensive data, the capacity to analyze and respond to this information effectively is sometimes limited by insufficient training of personnel and resource constraints (Chinwe, 2024).
Another problem is that rapid advancements in fraud techniques can outpace the bank’s current enforcement measures, rendering some controls less effective over time. Moreover, high operational costs associated with maintaining state-of-the-art monitoring systems can lead to budgetary constraints, forcing trade-offs between technological upgrades and other operational priorities (Ibrahim, 2025). These challenges create a gap between the intended protective benefits of internal enforcement and the actual reduction in fraudulent incidents, undermining both customer confidence and regulatory compliance.
Objectives of the Study
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To evaluate the effectiveness of internal enforcement mechanisms in curbing fraudulent activities at GTBank.
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To identify challenges related to system integration and personnel training.
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To recommend strategies to optimize enforcement practices and improve fraud detection.
Research Questions
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How effective are GTBank’s internal enforcement mechanisms in reducing fraud?
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What integration and training challenges impede optimal enforcement?
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What measures can enhance the overall effectiveness of internal controls?
Research Hypotheses
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H₁: Robust internal enforcement mechanisms significantly reduce fraudulent activities at GTBank.
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H₂: Integration challenges and inadequate training negatively impact enforcement effectiveness.
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H₃: Enhanced monitoring and continuous staff development improve fraud detection outcomes.
Scope and Limitations of the Study
This study focuses on GTBank’s internal enforcement practices across selected branches over the past three years. Data are gathered from internal audit reports, fraud incident records, and staff interviews. Limitations include variability in branch practices and evolving fraud techniques.
Definitions of Terms
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Internal Enforcement Mechanisms: Systems and procedures designed to detect and prevent fraudulent activities within a bank.
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Fraudulent Activities: Unauthorized or deceptive practices that result in financial loss.
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Legacy Systems: Older technology infrastructures that require integration with modern enforcement tools.
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