NIBSS HIGHLIGHTS THE DOMINANT FRAUD TECHNIQUE ACROSS NIGERIAN BANKS

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By: Fasasi Hammad

The Nigeria Inter-Bank Settlement Systems (NIBSS) has identified social engineering as the most prevalent fraud technique affecting Nigeria’s banking sector and digital payment ecosystem.

Speaking on Wednesday at an industry event in Lagos, the Managing Director of NIBSS, Premier Oiwoh, disclosed that fraud-related losses through digital payment channels declined by 51 percent, falling to ₦25.85 billion in 2025 from ₦52.26 billion in 2024.

Oiwoh noted that insider abuse and internal compromise remain the most significant threats within the broader fraud landscape, stressing that employee involvement continues to pose serious risks to financial institutions.

According to him, fraud incidents are most common across e-commerce and internet banking platforms, followed by point-of-sale (PoS), mobile, and web-based channels within Nigeria’s banking and fintech ecosystem.

He further observed that fraud typologies such as SIM swap fraud, account takeovers, and phishing attacks are becoming increasingly sophisticated across the sector.

“Coordinated industry efforts last year alone prevented potential losses of approximately ₦20 billion,” Oiwoh revealed. “Social engineering remains the dominant fraud technique, with insider involvement representing the most critical challenge. Investigations continue to confirm the high level of internal participation, while schemes such as SIM swap fraud, account compromise, and phishing are rapidly evolving. Awareness remains crucial, as many victims are still easily deceived.”

Providing historical context, Oiwoh stated that actual fraud losses stood at ₦17.67 billion in 2023, before surging to ₦52.26 billion in 2024, largely due to a single major incident involving ₦31.1 billion. He added that losses declined sharply in 2025 following enhanced industry interventions.

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As a way forward, he emphasized the need for stronger internal controls, closer monitoring of staff activities, and sustained collaborative efforts across the financial industry, noting that institutional trust remains vital in combating fraud.

Oiwoh also disclosed that Lagos State accounts for the highest incidence of fraud at 63 percent, followed by Abuja, Ogun, Rivers, and Delta States.