IT is heartening that the Economic and Financial Crimes Commission (EFCC) and the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) have agreed to strengthen collaboration on the fight against bank fraud in the country. This is a welcome development, provided they play their roles with sincerity of purpose. The agreement to cooperate in the battle against bank fraud was reached during a recent visit of ACAEBIN leaders to EFCC’s Lagos office. Speaking during the visit, the association’s chairman, Mr. Abiodun Adereju, rightly noted that the government’s fight against corruption cannot be won without the involvement and cooperation of the banks.
In that regard, he stressed the need for the association and the EFCC to constantly compare notes on how to improve their information sharing mechanism. Describing ACAE- BIN as the “third line of defence” in the banking industry, Mr. Adereju pledged the commitment of the association to the fight against bank fraud. On his part, the Head of Governance Crime Unit at the commission, Mohammed Rabo, welcomed the agreement and tasked the association on the key issue of trust, especially relating to information coming from the banks to enable the agency (EFCC) discharge its duties.
There is no doubt that any genuine collaboration between ACAEBIN and EFCC on the fight against corruption will be a step in the right direction. Such partnership with chief audit executives of the banks will help to curtail fraud in the industry. There is also no doubt that some banks are fast becoming conduit pipes for corruption, especially money laundering. As financial intermediaries supplying services in the economy, many banks seem to have abused this role. Some have compromised themselves in the quest for profit-making, at the detriment of the economy.
In some cases, some banks have been found to have compromised their fiduciary roles to their shareholders, owners and customers, in the quest for easy money.
But, as the proverbial “third line of defence” in the banking industry, the bank chief audit executives are in a prime position to prevent and detect fraud in their institutions. Regrettably, the corporate auditing arena has become a particularly fertile ground
for self-serving biases. It is public knowledge that corporate auditing, as currently practised, has become vulnerable to bias. This happens often, partly because many audi- tors are in the direct employ of the banks, and would want to remain in their employers’ good books. This is more so as they are hired and can be fired by the banks they audit.
We suspect that is what informed the seeming reservations of the Head of EFCC Governance Crime unit, Mr. Rabo, when he tasked the auditors on the need for trust, with regard to requests for information for proper profiling and documentation of some bank customers. His concern may be legitimate. But, how the auditors balance the need for customers’ confidentiality with the sharing of information with the anti-graft agency remains an open question.
However, while we support any initiative that could assist government in its fight against corruption, our worry is the employer-employee relationship between ACAEBIN members and the banks, which may undermine the plan for the ACAEBIN/ EFCC collaboration. This problem could defeat the purpose of the intended collaboration.
Altogether, the planned cooperation is timely. The war against graft requires all hands on deck. Information sharing and cooperation of all relevant institutions are key to its success. We, therefore, urge all chief audit executives to appreciate their important role in the fight against bank fraud. They should do everything within their power to boost the government’s efforts on the war against corruption.