Abstract

Digitalization has created an opportunity for growth of many businesses in the world today. In as much as digitalization has brought about cyber fraud, it has also help minimize the risk of fraud in organization. This study is aimed to assess how digitalization helps minimize the risk of fraud in commercial banks in Cameroon.

Specifically this study sought to identify the main platforms used in digitalization in commercial banks in Cameroon, to evaluate the challenges of digitalization in commercial banks in Cameroon and to assess the effects of digitalization on fraud minimisation in commercial banks in Cameroon.

Both primary and secondary data were used for this study and with a sample 50 respondents from 5 commercial banks, data was collected and analysed using SPSS version 22. Results from findings showed that Cameroon’s main digitalization platforms include ATMs, online banking, mobile banking, e-banking, mobile money, sales outlets and mobile payrolls.

Also Digitalization challenges in commercial banks included; lack of infrastructure for implementing the digital business strategy in Cameroon, Banks also lack the capital to invest in human resource training using digital instruments and many more. The study also revealed that there is a significant relationship between digitalization and fraud minimization and commercial banks in Cameroon. The study should also show that increased use of digitalization in the case of commercial banks in Cameroon should cause fraud to decrease.

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the study

Digitalization is now essential because companies and organizations, including commercial banks, are trying to use better and more efficient ways to deliver service to consumers and customers. Despite a clear trend towards digital services, several financial institutions still regard the digitization process as difficult and expensive.

Abbasi and Weigand & Janek, (2017) said that information and communication technologies have strengthened the financial industry and have encouraged financial institutions to spend more in the digitalization process, in particular, support for banking services, risk management and greater efficiency.

A research by Gareth Jones (2006), cited that”Banks in North America, Europe, Asia-Pacific and Latin America, spent a total of 241 billion dollars on information technology in 2016, up nearly 4% from 2015. Their statement also claimed that the practice of digitizing services by financial institutions represents a new turning point and leads to increased customer satisfaction due to the diversity of service offered.

As a result of the technological advances, businesses and business interactions have changed. This allows for the reconfiguration of design, marketing, production, delivery and services through supply chains, autonomous structure, outsourced manufacturing and contract warehousing and delivery. Technological advances have promoted advanced digital transformation, which not only comprises technologically-savvy companies, but also high tech-based large-scale companies. (Weill, 2018).

In order to develop into an Internet economy, Cameroon’s information and telecommunications sector has proven to be a key driver of the country’s economy. In recent years, the increasing adoption of sophisticated Internet-systems in banks has played a key role in enabling Cameroon’s Internet economy.

For example, according to Adekunle & Tella, (2008), the Global System of Mobile (GSM) technology is designed to work effectively with current infrastructure, particularly the World Wide Web. GSM technology has been adopted by a significant section of the population to facilitate business transactions. Another element that boosted the digital economy in Cameroon was most tertiary academic institutions’ contributions to the Internet economy in the form ofcompetitive online degrees and Internet ads Adekunle & Tella, (2008). As a result, the majority of financial institutions and their customers are urged to use the Internet.

In terms of computers, cell phones, and the Internet, Africa as a whole, and Nigeria in particular, has amazing statistics. These extremely high internet penetration rates are projected to skyrocket in the future years. According to Seetharaman et al. (2006), there is a contradiction in that the rise of computer technologies in organizations has considerably boosted people’s potential to deceive. Many observers for example, the Audit Commission, (1987) have noted that the potential for ICT misuse is growing in lockstep with technological innovation..

In terms of computers, cell phones, and the Internet, Africa as a whole, and Nigeria in particular, has amazing statistics. These extremely high internet penetration rates are projected to skyrocket in the future years. According to Seetharaman et al. (2006), there is a contradiction in that the rise of computer technologies in organizations has considerably boosted people’s potential to deceive. Many observers (for example, the Audit Commission, 1987) have noted that the potential for ICT misuse is growing in lockstep with technological innovation.

Various financial institutions in Cameroon have accepted the use of computers in many areas of their operations, including documenting daily collections, tracking customer savings (account data), preparing and presenting yearend financial reports, and so on. Following the collapse of CONFINEST, a prominent microfinance organization in Cameroon, numerous financial institutions in the country have switched from manual to computer-based operations.

Financial institutions in Cameroon have accepted and are utilizing ICT in practically all areas of their operations since the introduction of ICT packages., because of the cross-sectional relationship It looks to be reaping the majority of the benefits of the technological revolution, as seen by its use of debit and credit cards, inter-regional money transfers, and the use of computerized accounting systems in the recording, preparation, and presenting of financial reports.

1.3 Problem Statement

Digitalisation affects Cameroon’s financial institutions, which are obviously linked to the number of those who pay their bills via Internet banking and mobile banking. Customers are reduced in cost and demand by new ways of contacting them (Wright 2017).

The rates of fraud and new fraud are also rising, however, because of the advances in technology and other causes (Zagaris 2010). These new fraud chances can be exceedingly difficult to detect due to their technical complexity; as a result, institutions may spend significant resources seeking to discover and combat frauds Kranacher & Wells, (2011). Banks encounter difficulty in detecting and combating fraud, which can be exacerbated by the political, regulatory, and institutional structures in existence

 1.3 Objectives Of The Study

The general research objective is;

To analyze how digitalization helps minimize the risk of fraud in commercial banks in Cameroon.

Specific objectives include;

1. To identify the main platforms used in digitalization in commercial banks in Cameroon
2. To evaluate the challenges of digitalization in commercial banks in Cameroon
3. To assess the effects of digitalization on fraud minimisation in commercial banks in Cameroon.

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