The banking sector in Nigeria has encountered a significant loss of N9.5 billion due to electronic fraud in the year 2023.
In response to this worrisome trend, the Nigeria Electronic Fraud Forum (NeFF), chaired by the Central Bank of Nigeria, has called for urgent action and enhanced cooperation to counter the escalating wave of electronic fraud.
During its third quarter general meeting held in Lagos, the forum centered discussions on “New Strategies for Combating e-Fraud in a Cashless Environment.”
Premier Oiwoh, the Managing Director of the Nigeria Inter-Bank Settlement System (NIBSS), speaking at the meeting, underscored the disturbing surge in electronic fraud in the country, particularly through betting platforms.
Presented by NIBBS’s Chief Risk Officer, Temidayo Adekanye, Oiwoh stated, “Recently, we had the cashless policies from CBN, which was incurring a dramatic increase in the volume of transactions in the industry which variably as the impact of the volume of fraud in the industry itself.
Now, the increased efficiency has also meant that fraud has dramatically increased across the industry.
For Q1 2023, the total fraud reported through the industry forum portal was at N5.1 billion.”
He continued, “For fraud trends over the last five years, in 2019, we’re looking at about N3 billion and currently 2023, we are looking at about N9.5 billion to date. Fraud losses have increased dramatically over the last five years.”
The alarming statistics reveal a 39% increase in actual fraud losses between June and July 2023, amounting to N1.2 billion, marking a 54% surge over that period.
The utilization of betting platforms was identified as a primary channel for fraud, making recovery nearly impossible once funds are withdrawn.
Chairman of NeFF and Director of Payment Systems Management at the Central Bank of Nigeria (CBN), Musa Jimoh, emphasized the need for a collaborative effort to counter cybercriminals and safeguard the financial system.
Jimoh stated, “The objective is to have zero fraud but you know, this is a gradual process because as you’re building techniques, they’re also exploiting other areas.
As more people come into the financial sector as more transactions happen, people are vulnerable and so enlightenment education, we would continue to push it which is why it’s going to be a very long journey.”
He expressed optimism that through a combined effort involving the bankers’ committee and other stakeholders, a comprehensive understanding of security practices would gradually lead to a substantial reduction in fraud incidents.
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