An investigation of internal enforcement measures on curbing operational fraud in banking: a case study of Guaranty Trust Bank
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Background of the Study
Operational fraud remains a pervasive challenge in the banking sector, undermining both financial stability and consumer trust. Guaranty Trust Bank (GTBank) has taken a proactive stance by strengthening internal enforcement measures to curb fraudulent activities. By deploying a comprehensive framework that includes real-time surveillance, stringent internal audits, and robust whistleblowing mechanisms, GTBank aims to create a secure operational environment (Eze, 2023). The bank’s internal enforcement measures are designed to detect anomalies early, mitigate risks, and ensure strict adherence to internal controls, thereby reducing the incidence of fraud.
In recent years, advancements in technology—such as artificial intelligence and data analytics—have further enhanced the bank’s ability to monitor transactions and identify suspicious patterns (Okoro, 2024). These tools have enabled GTBank to move beyond reactive measures to a more proactive fraud prevention strategy. Continuous training programs for staff and regular updates to internal policies complement these technological enhancements, ensuring that employees remain vigilant and well-informed about evolving fraud schemes.
Furthermore, a culture of accountability is cultivated through transparent reporting channels and rigorous disciplinary measures for policy violations. By integrating these measures into daily operations, GTBank not only deters potential fraudsters but also reinforces a strong ethical culture throughout the organization (Chukwu, 2025). The bank’s efforts have led to noticeable improvements in operational efficiency and risk management, thereby safeguarding stakeholder interests.
However, the implementation of internal enforcement measures is not without its challenges. The balance between stringent controls and operational efficiency must be carefully managed to avoid excessive bureaucracy that may hinder day-to-day operations. Additionally, ensuring uniform enforcement across all branches and departments presents an ongoing challenge. This study investigates the effectiveness of GTBank’s internal enforcement measures in curbing operational fraud, while also identifying key challenges and proposing strategies for improvement.
Statement of the Problem
Despite robust internal enforcement measures, GTBank continues to encounter operational fraud challenges that compromise its financial integrity and customer trust. One major issue is the uneven implementation of internal controls across various departments, which creates vulnerabilities in the bank’s overall fraud prevention framework (Ibe, 2023). Inconsistent enforcement can lead to gaps where fraudulent activities may go undetected until significant damage has occurred.
Moreover, while advanced technologies such as AI and real-time analytics have enhanced fraud detection capabilities, their effectiveness is sometimes limited by integration issues with legacy systems. These technical constraints can delay the timely identification and mitigation of fraudulent activities, thereby allowing fraud to persist (Ude, 2024). Additionally, human factors such as complacency and resistance to change among employees further undermine the effectiveness of internal enforcement measures. Inadequate training and a lack of awareness about emerging fraud techniques exacerbate this problem, resulting in lapses in vigilance and control.
Furthermore, the cost of maintaining a sophisticated fraud prevention system is substantial, and budget constraints may limit the extent to which new technologies can be integrated and maintained. This financial pressure, coupled with the rapid evolution of fraud tactics, creates a persistent challenge in balancing cost efficiency with robust fraud prevention. Consequently, GTBank must continuously review and refine its internal enforcement measures to ensure they remain effective. This study aims to dissect these challenges in detail and offer recommendations to enhance internal controls, thereby reducing the incidence of operational fraud.
Objectives of the Study
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To assess the effectiveness of internal enforcement measures in curbing operational fraud at GTBank.
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To identify the challenges in the uniform implementation of internal controls across departments.
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To propose strategies to improve the integration of advanced fraud detection technologies with existing systems.
Research Questions
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How effective are GTBank’s internal enforcement measures in detecting and preventing operational fraud?
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What are the primary challenges in implementing uniform internal controls across the bank?
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What strategies can enhance the integration of technology and human oversight to reduce fraud?
Research Hypotheses
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H1: Robust internal enforcement measures significantly reduce the incidence of operational fraud at GTBank.
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H2: Inconsistent application of internal controls negatively impacts the bank’s fraud prevention effectiveness.
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H3: Improved integration of advanced technology with legacy systems is positively correlated with reduced operational fraud.
Scope and Limitations of the Study
The study focuses on internal fraud prevention mechanisms at GTBank, drawing on internal audit reports, employee surveys, and technological performance data. Limitations include potential underreporting of fraud incidents and challenges in measuring the direct impact of specific enforcement measures.
Definitions of Terms
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Internal Enforcement Measures: Policies and procedures implemented to monitor and prevent internal fraud.
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Operational Fraud: Fraudulent activities that occur within the bank’s operational processes.
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Internal Controls: Systems and procedures designed to safeguard assets and ensure accurate financial reporting.
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Legacy Systems: Older technology platforms that may hinder the seamless integration of modern fraud detection tools.
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