Nigeria digital battles going more deep as banks faces more pressure to collaborate ans report any in cyber theft by the Apex bank.

Electronic fraud has become one of the most persistent threats to Nigeria’s financial system and the challenge is no longer just about stolen money but about trust, accountability and collective responsibility. As digital banking expands and more Nigerians rely on online platforms to move money, fraudsters have become more sophisticated, exploiting gaps in reporting, weak internal controls and poor information sharing among institutions. Recent disclosures by the leadership of the Nigeria Inter Bank Settlement System NIBSS paint a detailed picture of a system under pressure but also one that has the tools to fight back if they are properly used.

At the heart of the discussion is a simple but powerful message reporting fraud is no longer optional. According to NIBSS, many of the losses and repeated attacks recorded across the industry could have been prevented if financial institutions had taken reporting seriously. 

When fraud cases are ignored or quietly handled internally, criminals are given the freedom to simply move on to the next bank, the next platform or the next victim. This pattern, NIBSS warns, must end.

The Managing Director of NIBSS, Premier Oiwoh, has been clear that fraud reporting goes far beyond attempts to recover stolen funds. While recovery is important, reporting is primarily about building a trail that allows regulators, security agencies and financial institutions to identify patterns, track individuals and shut down criminal networks. Without proper reporting, fraud becomes a revolving door where the same actors strike repeatedly under different guises.

Oiwoh revealed that there have been several instances where known fraudsters were able to abandon one bank and resurface in another simply because their previous crimes were not reported into the wider system. This lack of transparency creates blind spots that criminals are quick to exploit. In response, NIBSS is pushing for what it describes as zero tolerance for non reporting, whether the fraud originates from outside the institution or from within.

To strengthen the industry’s defenses, NIBSS has invested heavily in shared infrastructure designed to make fraud detection and prevention more effective. One of the most significant tools in this effort is the Person of Interest Portal, developed in collaboration with the Central Bank of Nigeria, the Nigerian Financial Intelligence Unit and various security agencies. This portal serves as a centralized database of individuals linked to fraudulent activities across the financial system.

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Since its launch in 2019, the portal has captured the details of about 3,417 individuals implicated in fraud related cases. These records include names and photographs, making it easier for investigators and banks to identify repeat offenders. The portal is not a dormant archive but an actively used resource that supports ongoing investigations and enforcement actions by security agencies.

Beyond this, NIBSS has worked to integrate multiple watchlists into a single ecosystem. Industry watchlists, the Central Bank database and the Person of Interest Portal are now connected, allowing for more seamless information flow. This integration also includes records of politically exposed persons, commonly referred to as PEPs. Over 214,000 individuals fall into this category and their inclusion is not an accusation of wrongdoing but a regulatory requirement aimed at managing risk and ensuring transparency.

Through application programming interfaces, banks can now verify and validate customer identities in real time. This capability is designed to close loopholes that fraudsters often exploit during account opening and transaction processing. When properly used, these tools give banks the ability to confirm identities instantly and flag suspicious activity before losses occur.

Despite these advances, fraud statistics from the past year show that criminals continue to find ways to cause damage. Internet and mobile banking platforms remain the most frequently targeted channels by volume. During the year under review, internet based platforms recorded 27,460 fraud cases, while mobile platforms followed closely with 22,470 cases. These figures reflect the heavy reliance on digital channels and the attractiveness of these platforms to criminals seeking scale and speed.

When it comes to financial impact, internet banking stands out as the most damaging channel. Although it recorded fewer cases compared to some other platforms, the losses were far greater. Just 4,507 incidents resulted in losses estimated at N13.37 billion. This suggests that while attacks on internet banking may be fewer, they are often more carefully planned and executed, leading to higher value losses per incident.

Social engineering continues to be the most dangerous fraud tactic facing the industry. In 2025, nearly half of all recorded fraud cases were linked to social engineering schemes. These attacks accounted for about 47 percent of total fraud volume and resulted in losses estimated at N17.84 billion. Social engineering thrives on deception rather than technical sophistication, relying on tricking victims into handing over sensitive information or authorizing transactions under false pretenses.

Other methods remain common as well. Card theft accounted for 17 percent of fraud cases by volume, while robbery contributed 11 percent. These figures highlight the continued overlap between traditional physical crime and modern digital fraud. Criminals are increasingly blending old and new tactics, exploiting both human vulnerability and technological gaps.

Geography also plays a role in the fraud landscape. Lagos State once again emerged as the country’s primary fraud hotspot, accounting for more than 63 percent of total fraud volume in 2025. As Nigeria’s commercial hub and the center of its financial activity, Lagos naturally attracts both legitimate transactions and criminal attention. 

The Federal Capital Territory Abuja and other major urban centers have also been identified as growing bases for fraud operations, reflecting the spread of digital infrastructure and economic activity across the country.

While the overall data suggests some improvement in terms of reduced losses, NIBSS has expressed concern about a troubling trend within the industry declining compliance with fraud reporting requirements. Oiwoh disclosed that the number of financial institutions actively reporting fraud cases has fallen significantly. From a peak of 45 institutions in the second quarter of 2024, the figure dropped to just 34 by the fourth quarter of 2025

This decline raises serious questions about transparency and commitment within the sector. Reduced reporting undermines the effectiveness of shared tools and databases, weakening the collective defense against fraud. It also creates an uneven playing field where compliant institutions bear the burden of disclosure while others operate in silence.

NIBSS has been unequivocal in its stance that proper reporting must be enforced without exception. Whether fraud is carried out by external actors or internal staff, it must be documented and shared through the appropriate channels. Anything less, Oiwoh argues, leaves the system vulnerable and encourages repeat offenses.

Another critical area highlighted is identity management. According to NIBSS, proper validation of Bank Verification Numbers and National Identification Numbers is non negotiable. Simply collecting these identifiers without verifying them exposes banks to significant risk. With the infrastructure now in place, institutions can validate customer identities through secure interfaces, resolving up to 95 percent of know your customer challenges if fully implemented.

Internal controls are equally important in the fight against fraud. NIBSS has emphasized the need for routine staff profiling, regular job rotation and mandatory vacation policies. These measures are designed to reduce the risk of internal collusion and prolonged manipulation of systems by dishonest employees. Lifestyle monitoring, though sometimes sensitive, is also identified as a key tool. In many cases, early warning signs were present but ignored, allowing fraud to escalate.

The message from NIBSS is clear fraud prevention cannot succeed in isolation. Banks must be willing to cooperate, share intelligence and trust one another. When institutions operate in silos, criminals gain the upper hand, exploiting gaps between systems and jurisdictions. Collaboration, supported by shared data and consistent reporting, is the most effective weapon against increasingly networked fraudsters.

As Nigeria’s financial system continues to evolve, the stakes are higher than ever. Digital innovation brings convenience and growth but also new risks. The tools to manage these risks exist, but their success depends on collective action, discipline and a willingness to confront uncomfortable truths. Reporting fraud is not about reputation management or regulatory box ticking. It is about protecting customers, preserving confidence and safeguarding the future of the financial system.