Nigeria’s financial institutions suffered a staggering loss of N52.26 billion to fraud in 2024, according to the latest report by the Nigeria Inter-Bank Settlement System (NIBSS). This marks a significant increase of N34.59 billion compared to the N17.67 billion recorded in 2023.
The NIBSS Fraud Report, which documents both attempted and successful fraud activities, revealed that the amount lost to fraud has surged by 196% over the past five years. This rise coincides with the rapid growth of digital payment transactions in the country.
Despite a 31% decline in the annual fraud count—from 101,624 incidents in 2020 to 70,111 in 2024—the financial losses have skyrocketed by 350%, rising from N11.61 billion in 2020 to N52.26 billion in 2024.
Key Findings from the Report
The report highlighted that the ratio of total reported fraud value to the total value of transactions decreased from 0.0053% in 2020 to 0.0022% in 2023 but rose to 0.0040% in 2024. This indicates that while fraud incidents have become less frequent relative to transaction volumes, the financial impact of each incident has grown significantly.
Additionally, attempted fraud surged by 338% between 2023 and 2024, driven by vulnerabilities in the systems of certain financial institutions. Fraud activity peaked in the second and third quarters of 2024 before declining in the fourth quarter.
In 2023, a total of 80,658 unique customers fell victim to fraud, a 4% decrease from the 84,130 recorded in 2022. However, NIBSS emphasized that this decline does not lessen the severity of the issue, urging financial institutions to remain vigilant and strengthen their security measures.
Demographics of Fraud Victims
The report identified individuals aged 40 and above as the primary targets for fraudsters in 2023, a trend consistent with the previous year. This underscores the need for targeted educational campaigns to protect this demographic from fraudulent activities
Call for Regulatory Reforms
NIBSS stressed the importance of reviewing, modifying, and reinforcing existing regulations to reduce fraud risks and improve recovery efforts. The organization also called for increased collaboration among financial institutions to address the persistent challenges posed by fraud. The Nigeria Inter-Bank Settlement System is the central platform responsible for settling inter-bank transactions in Nigeria. It connects Deposit Money Banks (DMBs), Mobile Money Operators (MMOs), Switches, and Payment Service Providers (PSPs). The NIBSS Industry Fraud Desk compiles and analyzes reported fraud incidents to produce industry-wide reports.
Bottom Line
The significant rise in financial losses due to fraud highlights the urgent need for enhanced security measures and regulatory reforms in Nigeria’s financial sector. As digital payments continue to grow, stakeholders must work together to safeguard the system and protect customers from fraudulent activities.
