Nigerian banks recorded a N52.26 billion loss to fraud in 2024, according to the latest Nigeria Inter-Bank Settlement System (NIBSS) Fraud Report.
This represents a 196 percent increase from N17.67 billion recorded in 2023.
The surge in financial losses revealed growing security concerns within the country’s banking sector despite a reported decline in the number of fraud cases.
The report, which compiles fraud incidents across Nigerian banks, payment service providers and mobile money operators, revealed that although the number of fraud attempts declined by 31% between 2020 and 2024, the monetary losses skyrocketed by 350% over the same period.
In 2020, total fraud-related losses stood at N11.61 billion, compared to the N52.26 billion recorded in 2024.
Alarming Rise in Digital Fraud Cases
The report showed a 338% increase in attempted fraud between 2023 and 2024, attributing the rise to system vulnerabilities at certain financial institutions.
The second and third quarters of 2024 recorded the highest fraud activity before a marginal decline in the fourth quarter.
Despite the increase in financial losses, the total fraud-to-transaction ratio remained relatively low, fluctuating from 0.0053% in 2020 to 0.0040% in 2024.
However, the sharp rise in financial losses has raised concerns over the effectiveness of fraud prevention measures across banking institutions.
Fraudsters Target Older Customers
NIBSS identified individuals aged 40 and above as the primary targets of fraudulent activities in 2023, continuing a trend observed in previous years.
This persistent focus on older demographics highlights the need for enhanced security awareness campaigns to educate and protect vulnerable customers.
In 2023, 80,658 unique customers fell victim to fraud, a 4% decrease from the 84,130 victims recorded in 2022.
However, NIBSS cautioned that the decline in victim count should not be mistaken for an improvement in security, as fraud-related financial losses continue to escalate.
Regulatory Gaps and Industry Response
The report called for a thorough examination, modification, and reinforcement of existing banking regulations to curb fraud and improve recovery rates. Industry stakeholders have also been urged to collaborate on security measures to mitigate risks associated with digital transactions.
As Nigeria’s financial sector continues to expand its digital payment infrastructure, experts emphasize the importance of robust cybersecurity frameworks to safeguard consumer funds and maintain trust in the banking system.
NIBSS reiterated its commitment to working with financial institutions, regulatory bodies and law enforcement agencies to combat fraud, urging banks to strengthen internal security protocols and adopt proactive fraud detection mechanisms to prevent further losses.
