By Staff Reporter
July 11, 2025

Nigeria’s financial sector is grappling with a dramatic 45% surge in fraud cases in 2024, with losses totaling N52.26 billion, according to the latest Nigeria Inter-Bank Settlement System (NIBSS) report cited by Fintech Magazine Africa. The Central Bank of Nigeria (CBN) has raised concerns as 70% of these losses are linked to digital platforms, highlighting vulnerabilities in the country’s rapidly growing fintech ecosystem. This escalation, driven by sophisticated cyberattacks and insider threats, threatens consumer trust and the stability of Nigeria’s financial system.

Unprecedented Losses in 2024

The NIBSS report reveals that fraud-related losses in 2024 jumped by 196% compared to N17.67 billion in 2023. While the number of fraud cases dropped by 31% from 101,624 in 2020 to 70,111 in 2024, the financial impact has skyrocketed, with losses rising 350% over the same period. The second quarter alone saw N42.6 billion lost, a staggering 8,993% increase from Q1 2024’s N468.4 million, per the Financial Institutions Training Centre (FITC). “Miscellaneous and other fraud” accounted for 96.46% of Q2 losses, with computer/web fraud and unauthorized withdrawals contributing significantly.

Digital Platforms as Fraud Hotspots

Digital channels, including mobile banking, web platforms, and point-of-sale (POS) terminals, have become prime targets, with 70% of losses tied to these platforms. The CBN’s push for a cashless economy has driven a surge in digital transactions, but this has also amplified risks. In Q3 2024, fraudsters attempted to steal N115.9 billion, a 105% increase from Q2, though actual losses were reduced to N10.1 billion due to improved detection, according to FITC. Card-based fraud rose by 54.2% in Q3, and cash-related fraud spiked by 125%, signaling the evolving tactics of cybercriminals.

Regulatory and Industry Response

The CBN has intensified efforts to curb fraud, implementing stricter Know Your Customer (KYC) regulations and mandating POS agent registration. NIBSS operates a central fraud monitoring system, but enforcement remains inconsistent. Dr. Chizor Malize, FITC’s Managing Director, warned that rising fraud erodes trust in the financial sector, urging the adoption of AI-driven security tools. Flutterwave’s partnership with the Economic and Financial Crimes Commission (EFCC) to establish a cybercrime research center reflects a growing push for collaborative solutions. However, experts like Pattison Boleigha of Pattison Consulting emphasize the need for stronger governance and consumer awareness to close regulatory gaps.

High-Profile Cases Expose Vulnerabilities

Notable incidents in 2024 include a First Bank employee allegedly siphoning N40 billion into various accounts, including his wife’s, and Flutterwave recovering $24 million lost to unauthorized POS transactions. These cases highlight systemic weaknesses, including lax internal controls and insider collusion. The EFCC has noted that 70% of financial crimes in Nigeria originate in the banking sector, with both insider and outsider involvement. The CBN’s Bank Verification Number (BVN) system, while foundational to Nigeria’s fintech boom, has been exploited due to poor management, prompting tighter controls.

Path Forward: Balancing Innovation and Security

The surge in fraud underscores the need for robust security measures as Nigeria’s digital economy grows. Experts advocate for end-to-end encryption, biometric authentication, and non-repudiation practices to ensure transaction accountability. The CBN’s watchlist for BVNs linked to fraud aims to deter repeat offenders, but its effectiveness depends on consistent enforcement. As fintech investments continue to rise—evidenced by Paystack’s acquisition by Stripe in 2020—stakeholders must prioritize consumer trust. “Fraudsters exploit gaps in security systems, and only a unified approach can stem the tide,” said Olwasegun Ojumola, Senior Fraud Analyst at PiggyVest.

With Nigeria’s financial sector at a crossroads, the CBN and industry leaders face mounting pressure to innovate while safeguarding customers. The 45% fraud surge serves as a wake-up call, demanding urgent action to protect Africa’s largest economy from further losses.

Sources: Fintech Magazine Africa, Financial Institutions Training Centre (FITC), Nairametrics, Techpoint Africa