A three-storey building on Mozambique Street, around Mexico Square, was packed with appeared aggrieved. A taller man was navigating through the congested hallway on the first floor, appearing nervous and constantly glancing at his watch. Sisay Tegenu seemed like he was racing against time.

Sisay had good reason for his anxiety. Several who jammed the building last week were prey to financial scammers. The building houses a department of the Federal Police Crime Investigation Bureau.

The day before, Sisay was the victim of a scam. Someone called him pretending they were an employee of the Commercial Bank of Ethiopia (CBE). The scammer told Sisay he was trying to integrate his CBE account with another account he holds at the Bank of Abyssinia (BoA).

Sisay followed instructions and changed his password using his smartphone. Two hours later, he received a notification from the CBE that he had transferred 85,000 Br.

“I couldn’t believe my eyes,” he told Fortune. “I’m left with only 3,000 Br.”

The father of four suspects the scammer could be someone close to him, who should know he holds accounts at both the banks.

Berhanu Abate, head of the Bureau, was not surprised. He recently came close to falling victim to a scam perpetrated by individuals claiming to work for the CBE. Neither were the requisitions he received a novelty. The scene is an everyday occurrence for him. At least 10 people visit the Bureau each day.

“Financial fraud is spreading like wildfire,” said Berhanu.

A recent Ministry of Justice (MoJ) study revealed that the banking industry lost close to two billion Birr to fraud in the past four years. Half of these were incurred by the state-owned CBE. The Bank of Abyssinia accounted for 17pc of the loss. Published two months ago, the study was conducted on 155 cases filed in courts. It discovered commercial banks were a target for 370 billion Br in attempted fraud over the past five years.

However, this is the tip of the iceberg. The study covered a small fraction of the financial crimes committed, says Awol Sultan, senior prosecutor and head of the press secretariat at the Justice Ministry. About 700 court cases involving 85 million Br have been reported in the last two months. Close to 90pc bank frauds are committed in Addis Abeba.

“Banks are reluctant to share information with the authorities,” said Awol.

Beyond withholding information, the report alleged, some banks even attempt to negotiate with perpetrators to recover stolen money. The problem is alarming, for less than 16pc of the money stolen from banks is recovered, according to KMPG, an international consulting firm.

Berhanu says some employees working for the state-owned Ethio telecom are involved in these crimes. His bureau has held a dozen working for Ethio telecom and banks in custody, under investigations for alleged involvement in some fraud victims like Sisay.

Cheque-related fraud, likely the oldest form of financial fraud, accounts for over a third of all economic crimes. Forgery and theft of cheques are the most common. The Ethiopian banking industry is particularly vulnerable, as most branches do not have the tools to carry out ultraviolet checks to identify fraudulent cheques. However, the CBE fares relatively better at deploying ultraviolet scanners.

Another common financial crime is unauthorised withdrawal. According to Dahlak Yigezu, vice president for digital banking at the CBE, in most cases, this is committed using forged documents and IDs.

But Berhanu sees fraud in mobile banking as growing at an alarming rate. According to the Justice Ministry, crimes on electronic payment platforms account for 14pc. It is a trend likely to continue with the growth of digital banking.

Although cash remains king, electronic banking is gaining momentum. Commercial banks have adopted digital platforms enabling clients to remotely access services such as cash withdrawal, transfer, and utility payments.

Mobile banking was introduced in 2015 with the arrival of two mobile money providers – HelloCash and M-Birr. The CBE launched its digital money transfer platform (CBE-Birr) two years later, followed by Dashen Bank’s Amole mobile wallet. Awash Bank unveiled its “Awash Birr” platform two years ago.

Almost all commercial banks and microfinance institutions (MFIs) provide mobile money services today. More than a dozen mobile banking, wallet, and money platforms are operating. Combined, they facilitated transactions valued at 320 billion Br last year.

Amole Wallet has close to 3.5 million users. The CBE boasts 5.4 million users on its platform, which accounts for nearly 40pc of the country’s 14.5 million mobile banking users.

The progress is twinned by digital security vulnerability and financial fraud exposure. Rapid technological advancement plays a significant role in festering fraud as it allows scammers to thrive from virtually anywhere, argues Fitsum Wesen, a cybersecurity management expert.

Investigators like Berhanu learned that most financial crimes in mobile banking are committed through password theft. Law enforcement officers caution that strong authentication details are vital since mobile devices are easily lost or stolen. A digital banking service requires basic literacy, but most users are unaware of financial fraud, says Berhanu.

Not even financial firms are privy to the need for digital security. One of the vulnerabilities comes with using standard communication channels and the increased opportunity for hackers to access users’ phones remotely. Most service providers use these channels for their mobile money offerings. And mobile banking presents challenges, including growing malware threats targeting mobile channels.

Federal agencies like Financial Intelligence Service receive up to 2,000 complaints annually, disclosed Endale Assefa, head of communications.