Indications that incidents of fraud in Nigeria’s banking system remain unabated despite efforts by the monetary authorities and anti-graft agencies have emerged as money lost to fraudsters rose to N53 billion in 2024/
The latest report by the Nigeria Inter-Bank Settlement System (NIBSS) showed that N52.3 billion was lost to fraud in 2024 as fraudsters attempted to steal N86.4 billion from the banks during the year.
According to the data from the NIBSS, incidents of fraud in Nigeria’s banking system has nearly tripled over the past five years when the 2024 fraud loss is compared to the reported N11.6 billion in 2020.
The NIBSS stated: “The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector.”
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It identified the migration from cash-based transaction system to digital system as one of the key factors responsible for the rising frauds in the country.
With Nigeria boasting of having one of the strongest digital payments system in Africa, tech startups in the country secured approximately $400 million in funding in 2024.
Available reports indicated that fraudsters were adopting sundry tactics, including the conversion of funds into gift cards and the opening of accounts using the stolen identities of bank customers to perpetrate frauds in the financial system
While estimating that N400 million had been deposited into accounts created with the stolen identities of senior citizens, the NIBSS disclosed that some of the funds had been retrieved and bank employees involved in the fraud were being investigated.
Currently, Nigeria is classified as a “grey list country” by international watchdogs, and other countries such as South Sudan, Bulgaria, Monaco, and Croatia, due to weaknesses in their policy measures in combating money laundering and financing terrorism.
In its sustained anti-graft battles against fraudsters, the Economic and Financial Crimes Commission (EFCC) has arrested and prosecuting hundreds of Nigerians and foreigners over their involvement in internet fraud. For instance, in December 2024, the agency took into custody 792 suspects in the Victoria Island area Lagos.
The spokesperson of the agency, Dele Oyewale, then stated that foreign criminal organizations were recruiting Nigerian partners to target victims online through phishing schemes, primarily focusing on individuals in the United States, Canada, Mexico, and other European countries to cause havocs in the financial system.
