Nigeria’s Banking Industry Loses N9.5 Billion to Electronic Fraud in 2023; NeFF Calls for New Strategies

The banking sector has experienced a significant financial blow due to electronic fraud, resulting in a staggering loss of N9.5 billion in 2023. This alarming trend has prompted the Nigeria Electronic Fraud Forum (NeFF) to advocate for innovative measures and enhanced collaboration to counteract the escalating wave of electronic fraud.

At the third quarter general meeting of NeFF, presided over by the Central Bank of Nigeria, participants converged to address the pressing issue of “New Strategies for Combating e-Fraud in a Cashless Environment.” The forum’s discussions focused on the imperative to curb electronic fraud in the digital era.

During the meeting, Premier Oiwoh, the Managing Director of Nigeria Inter-Bank Settlement System (NIBSS), highlighted the disconcerting rise in electronic fraud within the country, particularly through betting platforms. Temidayo Adekanye, Chief Risk Officer at NIBBS, conveyed Oiwoh’s observations: “Recently, we had the cashless policies from CBN, which was incurring a dramatic increase in the volume of transactions in the industry, which variably impacted the volume of fraud in the industry itself. For Q1 2023, the total fraud reported through the industry forum portal was at N5.1 billion.”

Adekanye continued, “For fraud trends over the last five years, in 2019, we were looking at about N3 billion and currently in 2023, we are looking at about N9.5 billion to date. Fraud losses have increased dramatically over the last five years.”

Citing a rise in fraudulent activities, Adekanye pointed out that the primary channels of concern were betting platforms. He stressed that once money enters these platforms or wallet accounts, it becomes nearly impossible to recover, leading to a potential five percent recovery rate across the industry.

Addressing the forum’s objective, Musa Jimoh, Chairman of NeFF and Director of Payment Systems Management at the Central Bank of Nigeria (CBN), emphasized the need for collective action against cybercriminals. He stated, “We all need to work together to see how we can make life extremely difficult for cybercriminals. We need to look at new ways, new techniques, and more efficient manners by which we can improve and guard against the banking and payment infrastructure.”

Jimoh highlighted the importance of education in safeguarding individuals against electronic fraud. He expressed the ambition for zero fraud, recognizing that achieving this goal would be a gradual and ongoing process. As more individuals enter the financial sector and transactions increase, the need for enlightenment education becomes paramount.

The collaboration among stakeholders, including the bankers’ committee, aims to equip Nigerians with the knowledge needed to protect their bank credentials, tokens, and sensitive information. By enhancing public awareness and security measures, the banking industry hopes to substantially reduce the incidence of fraud in the nation.