THE NEXUS BETWEEN OUTSOURCING OF STAFF AND BANKING FRAUD IN NIGERIA

The study examined the nexus between outsourcing of staff and banking fraud in Nigeria. Using secondary data, percentage increase in banking fraud (PBF) to was regressed on percentage of outsourcing staff involved. The estimation of the model was based on the ordinary least squares (OLS) method after the necessary pre-testing of the annual time series data using the augmented Dickey-Fuller (ADF) and the Philips-Peron (PP) tests, taken side by side with the related descriptive statistics. The study revealed that the contribution of outsourcing staff to fraud losses was the highest compared to the other core staff. The study model, considered good for prediction (DW=1.93), revealed that seventy-seven percent of frauds are attributable to insiders and about 23% of fraud losses are attributable to non-insider related frauds and forgeries (R2=0.77). Based on the findings, it is recommended, inter alia, that the recruitment process be strengthened through a robust, IT-enabled selection, referencing and. personnel lifestyle tracking system. Further, the work environment and job content must be enriched to curtail the opportunity to commit fraud presented when employees are allowed to have wholesome access to assets and information that allow them to both commit and conceal fraud.