Nigeria’s Banking Sector Lost N56.4bn to Fraud in Four Years – Report

Daud Olatunji

Nigeria’s banking sector has experienced a significant financial drain due to fraudulent activities, losing a staggering N56.37 billion over the past four years, according to a recent report by the geopolitical research firm SBM Intelligence.

The report highlights an alarming 83 percent increase in fraud-related losses from 2020 to 2023. 

Breaking down the annual figures, the banking sector lost N11.61 billion in 2020, N12.77 billion in 2021, N14.32 billion in 2022, and N17.67 billion in 2023.

 These numbers underscore the growing sophistication and success of fraudsters within the sector.

Fraud is a global issue in the financial sector, but it appears particularly pervasive in Nigeria. 

SBM Intelligence notes that although the number of fraudulent incidents peaked in 2021 and has since declined, the monetary losses have risen sharply. 

This trend suggests that perpetrators are becoming more adept at executing large-scale frauds without detection.

In 2023 alone, various forms of fraud led to significant financial losses:

Vishing: N3.80 million lost. Vishing, or voice phishing, involves defrauding individuals over the phone by coaxing them to reveal sensitive information.

Fake Assistance: Cost the sector N1.01 billion.

Missing and Lost Cards: Resulted in a loss of N122.2 million.

Phishing: Led to a forfeiture of N551.2 million.

Lack of Two-Factor Authentication (2FA): Accounted for N192.3 million in losses.

Card Theft: Caused a loss of N658.8 million

The report also details substantial losses from other sophisticated methods:

Social Engineering: A massive N9.37 trillion lost, highlighting the effectiveness of manipulating individuals into divulging confidential information.

Website/Server Hacking: N2.437 billion lost.

Robbery: N1.61 trillion lost.

PIN Compromise: N1.3 trillion lost due to unauthorized access to personal identification numbers.

Internal Collusion: N1.03 trillion lost, indicating the significant impact of insider threats.

Phone Theft and SMShing: These methods caused losses of N317.7 million and N30.7 million, respectively. SMShing, similar to phishing, uses text messages to lure individuals into providing sensitive account information.

Other Sources of Fraud: Contributed to a loss of N363.3 million.

The report also tracks the number of fraudulent incidents over recent years. In 2019, there were 44,947 incidents, which more than doubled to 101,624 in 2020. 

The number continued to rise, peaking at 123,918 in 2021 before declining to 101,669 in 2022 and further dropping to 95,620 in 2023.

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