Assessing The Effectiveness Of Fraud Risk Management Practices In The Banking Sector Of Ghana

Abstract

ABSTRACT The purpose of the study was to examine the effectiveness of fraud risk management practices in the banking sector of Ghana. The structured questionnaire was used as the main research instrument. Items in the questionnaire were measured on a five-point ranking scale. Both local and foreign universal banks in Ghana, were included study. A total of 100 employees, 50 from the local banks, and another 50 from the foreign banks, were sampled through purposive and convenient sampling techniques. Descriptive and inferential statistics were used to present and analyze the collected data. From the findings of the study, it was revealed that, the level of exposure to both internal and external fraud risk by the universal banks was very low. Largely the banks implemented fraud risk management practices by putting in place strategies in the area of sound risk management environment, policies and procedures and risk mitigation. The banks were highly effective in the management of fraud risk leading to improvement in the performance of the banks. Having a sound risk management environment, policies and procedures, coupled with an effective risk mitigation strategy, mainly contributed to the overall effectiveness of the universal banks in the management of fraud risk. High cost in the implementation of fraud risk management practices was the main challenge facing the universal banks in fraud risk management. The banks are encouraged to invest more in modern software tools, so as to control the incidence of fraud risks.