An appraisal of internal enforcement measures on mitigating operational fraud in banking: a case study of Guaranty Trust Bank
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Background of the Study
Operational fraud poses a significant risk to banks, leading to financial losses and reputational damage. Guaranty Trust Bank (GTBank) has strengthened its internal enforcement measures to mitigate such risks. These measures include enhanced internal controls, automated fraud detection systems, comprehensive employee training, and robust whistleblower programs (Ibrahim, 2023). By integrating advanced data analytics with traditional oversight practices, GTBank aims to create a proactive fraud prevention environment that swiftly identifies and addresses irregularities. The multi-layered approach not only focuses on technological solutions but also on fostering a culture of accountability and transparency across the organization. Research indicates that banks employing stringent internal enforcement measures report lower incidences of fraud and improved operational integrity (Chukwu, 2024). However, challenges persist in ensuring consistent application of these measures across all branches, particularly in integrating new technologies with legacy systems and overcoming internal resistance. GTBank’s initiative exemplifies the growing emphasis on combining technology with robust internal policies to safeguard assets and enhance overall operational resilience. This study examines the effectiveness of GTBank’s internal enforcement measures in mitigating operational fraud and identifies potential areas for further improvement (Uche, 2023).
Statement of the Problem
Despite the implementation of enhanced internal enforcement measures, GTBank continues to experience episodes of operational fraud. Inconsistencies in applying internal controls across branches, coupled with integration issues between new monitoring systems and older platforms, have led to delays in fraud detection and intervention (Adebayo, 2024). Furthermore, gaps in employee training and a lack of unified communication channels exacerbate the risk of fraud. These challenges indicate that while the bank’s internal enforcement framework is robust on paper, its practical application is hindered by operational and technological barriers. The persistence of fraudulent incidents undermines customer trust and increases financial risk, necessitating a critical review of current measures. This study aims to identify the key factors contributing to the limited effectiveness of internal enforcement in fraud prevention and to propose strategies to enhance these measures, ensuring a more resilient fraud mitigation framework.
Objectives of the Study
• To evaluate the impact of internal enforcement measures on mitigating operational fraud at GTBank.
• To identify operational and technological challenges affecting enforcement effectiveness.
• To propose strategies for optimizing internal controls and enhancing fraud prevention.
Research Questions
• How effective are internal enforcement measures in mitigating operational fraud at GTBank?
• What challenges impede the consistent application of these measures?
• What strategies can further strengthen fraud prevention in GTBank?
Research Hypotheses
H₀: Internal enforcement measures do not significantly reduce operational fraud at GTBank.
H₁: Internal enforcement measures significantly reduce operational fraud at GTBank.
H₀: Operational challenges do not affect the effectiveness of enforcement measures.
H₁: Operational challenges significantly hinder the effectiveness of enforcement measures.
H₀: Additional optimization strategies will not further reduce fraud incidents.
H₁: Additional optimization strategies will significantly enhance fraud prevention.
Scope and Limitations of the Study
This study focuses on GTBank’s internal enforcement measures and their role in mitigating operational fraud. Data will be collected from internal audit reports, fraud incident records, and interviews with compliance officers. Limitations include restricted access to sensitive internal data and evolving fraud tactics.
Definitions of Terms
• Internal Enforcement Measures: Policies and systems designed to ensure compliance and prevent fraud.
• Operational Fraud: Fraudulent activities arising from internal operational weaknesses.
• Data Integration: The process of merging data from disparate systems to improve oversight.
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