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Nigerian banks recorded a sharp decline in fraud-related losses last year, with total losses falling to N25.85 billion, according to fresh data released by the Nigeria Interbank Settlement System (NIBSS) Plc.
The figure represents a significant drop from the N52.26 billion lost to fraud in 2024, underscoring growing gains from tighter controls and improved identity management across the financial system.
Data from NIBSS also show that the number of reported fraud cases declined steadily, dropping from 123,918 cases in 2021 to 67,515 cases in 2025.
The Central Bank of Nigeria (CBN) attributed the reduction in both the value and volume of fraud to advancements in identity infrastructure, particularly the introduction of the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN).
Speaking at the technical kick-off session of the Nigeria Electronic Fraud Forum (NeFF) in Lagos, CBN Deputy Governor for Financial System Stability, Mr Philip Ikeazor, said the strengthened identity framework has significantly constrained impersonation and synthetic identity fraud.
The forum, themed “Shrinking Fraud Losses: ISO 20022 and Identity Management,” brought together key stakeholders in the financial ecosystem.
“Enhanced identity verification across banking, agent networks and high-risk digital channels is steadily closing gaps previously exploited by criminals,” Ikeazor said, describing identity infrastructure as a foundational pillar for payment system integrity.
He added that the National Identity Management Commission (NIMC) remains a critical partner in strengthening fraud prevention efforts nationwide.
Despite the decline in losses, Managing Director of NIBSS, Premier Oiwoh, warned that digital payments fraud is becoming more complex, driven by the rapid adoption of instant and remote banking channels.
He noted that Lagos remains a major fraud hotspot due to its high transaction volumes and dense financial infrastructure, while Abuja and some other cities are emerging as alternative operational bases because of comparatively weaker tracking along certain corridors.
Oiwoh urged banks to pay closer attention to staff lifestyle patterns, describing them as potential red flags for insider-related fraud.
“Banks no longer watch the lifestyle of their staff. What we have today is constant celebration of success in the sector,” he said.
He disclosed that NIBSS maintains a “persons of interest” portal, which houses a repository of fraudsters, watch-listed individuals, politically exposed persons (PEPs), and a CBN blacklist of fraudulent ex-bank staff.
According to him, the database currently contains about 114,000 PEPs and nearly 14,000 confirmed fraudsters.
Oiwoh revealed that web and mobile platforms account for the highest fraud volumes, while internet banking remains the most costly channel.
“Internet banking, with just 4,507 cases, resulted in the highest financial losses in 2025—indicating a low-volume but high-value fraud channel,” he said.
He added that social engineering, often aided by insider collusion, remains the dominant fraud threat, signalling a shift from system breaches to human manipulation.
Although the number of institutions reporting fraud incidents dropped from 45 in the second quarter of 2024 to 34 in the fourth quarter, Oiwoh expressed concern that the decline could indicate underreporting.
“Fraud reporting to NIBSS is mandatory for the collective good of the ecosystem. Penalties for non-compliance must be enforced,” he warned.
Ikeazor also highlighted the banking industry’s migration to ISO 20022, describing it as a game-changer that goes beyond compliance to deliver richer, structured transaction data for improved traceability and early fraud detection.
“As implementation progresses across real-time gross settlement and instant payment systems, transparency and data quality will improve, enabling faster investigations and better cross-border cooperation,” he said.
He called on the industry to commit to measurable fraud-reduction targets, supported by real-time identity verification, 24/7 monitoring, clear liability frameworks, and stronger collaboration with telecoms and payment service providers.
Chairman of NeFF and Director of the CBN’s Payments System Supervision Department, Dr Rakiya Yusuf, said Nigeria’s fraud-reduction journey has been driven by reforms such as EMV chip-and-PIN cards, two-factor authentication, consumer protection measures, and institutionalised information sharing.
“These interventions helped preserve public confidence in digital payments during periods of rapid growth,” she said, adding that BVN–NIN integration has closed long-standing loopholes exploited by fraudsters across banking and agent networks.
