Nigerian Banks Face N9.5 Billion Loss Through Online Frauds In 2023

Nigerians banks have lost around N9.5 billion in 2023 alone due to online frauds, the Nigeria Inter-Bank Settlement System (NIBSS) said Sunday.

The information was shared by NIBSS managing director Premier Owoih during the third-quarter meeting of the Nigeria Electronic Fraud Forum in Lagos.

Owoih, represented by Temidayo Adekanye--the chief risk officer of NIBSS--explained how online fraud in the financial sector, especially in the online gaming or gambling section, was a major concern, Business Insider reported.

"Recently, we had the cashless policies from CBN (Central Bank of Nigeria), which was incurring a dramatic increase in the volume of transactions in the industry which variably was the impact of the volume of fraud in the industry itself," Adekanye said during the meeting.

"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 added, according to Blueprint.

Owoih also noted the trend of e-fraud has increased exponentially, compared to prior years. He revealed that in 2019, N3 billion worth of fraud was reported, while in 2023, till now, the figure has reached N9.5 billion.

"Fraud losses have increased dramatically over the last five years," Owoih said. "So, as you can see also from the current perspective, from January to July 2023, there has been a slight jump between June and July, a 39% increase with 8,649 with the actual fraud losses in July 2023, we're looking at N1.2 billion which is a 54% increase over the period."

He added, "Now as you can see from January in general, we recorded about N2.7 billion in actual fraud losses."

Musa Jimoh, who serves as the chairman of NeFF and director of Payment Systems Management at the CBN, said this was the time to look at new strategies to fight against online fraud, because, if they fail to combat the cyber criminals, the entire banking system can be disrupted.

Hence, Jimoh shared that everyone needs to work together in order to make cyber criminals' life extremely difficult by implementing novel techniques to improve and guard the banking and payment infrastructure.

He also emphasized the need to educate the banking department on how to safeguard credentials or tokens the banks have provided.

This comes a month after the federal government took measures to remove all illegal or unregistered digital loan apps from Nigeria to ensure the safety of the citizens from indulging in fraud.