Bank fraud continues to be a critical issue in Nigeria, impacting many through various techniques that lead to significant financial losses.
The Nigeria Inter-Bank Settlement System (NIBSS) 2023 Annual Fraud Landscape reveals an alarming trend in international fraud activities targeting Nigerian banks’ customers.
The financial landscape in Nigeria has seen a substantial rise in fraud incidents over the past five years, closely tracking the expansion of financial transactions within the digital payments sector.
Specifically, the annual fraud count has surged by 112%, from 44,947 cases in 2019 to 95,620 in 2023. Concurrently, the financial losses attributed to fraud have escalated dramatically by 496%, soaring from N2.9 billion in 2019 to N17.67 billion in 2023.
Also, the ratio of total reported fraud value to the total value of transactions over the last five years has shown a slight increase, from 0.0019% in 2019 to 0.0022% in 2023. These statistics underscore the growing challenge and complexity of combating fraud in a rapidly evolving digital economy.
Below are the top 10 bank fraud techniques in Nigeria by number of cases and loss value for 2023:
10. SMSishing
SMSishing, though still relatively rare, has seen an explosive increase in frequency and financial impact, growing from just 19 cases in 2022 to 222 in 2023. The loss value also surged from N1.01 million in 2022 to N30.7 million in 2023, indicating the growing effectiveness and reach of these scams.
9. Fake Assistance
The number of fake assistance scams almost halved from 931 to 419, yet the financial losses soared from N133 million in 2022 to an astonishing N1.01 billion in 2023. This stark increase in losses despite fewer cases suggests that each incident has become significantly more damaging.
8. Missing/Lost Card
With a loss value of N122.2 million (down from N135.2 million in 2022), incidents of missing or lost cards have decreased significantly, from 993 cases in 2022 to 525 in 2023, with a slight reduction in associated financial losses as well. This trend might reflect better security practices and consumer awareness around safeguarding bank cards.
7. Lack of 2FA (Two-Factor Authentication)
The sharp decrease in cases lacking two-factor authentication—from 5,227 to 1,733—suggests improved adoption of this security measure. However, the rise in total loss value from N137.8 million to N192.3 million indicates that the remaining incidents are more costly.
6. Phone Theft
Phone theft shows a modest increase in both cases and financial losses, rising from 2,613 in 2022 to 2,796 in 2023, and from N259.2 million to N317.7 million in losses. This continued prevalence underscores the need for enhanced mobile security solutions.
5. Phishing
Phishing has tripled in frequency and more than doubled in loss value, marking a significant rise from 1,667 cases and N240.6 million in losses in 2022 to 4,457 cases and N551.2 million in 2023. This surge highlights an alarming increase in the effectiveness and frequency of phishing attacks.
4. PIN Compromise
PIN compromise remains relatively steady in occurrence but has seen a significant rise in financial impact, with losses increasing from N852.3 million in 2022 to N1.3 billion in 2023. This indicates that each incident is becoming more lucrative for fraudsters.
3. Card Theft
Although card theft cases and associated losses have decreased—from 9,988 cases and N916.3 million in 2022 to 6,825 cases and N658.8 million in 2023—the technique remains a significant threat, suggesting ongoing challenges in card security.
2. Robbery
Robberies have more than doubled in frequency and nearly quadrupled in financial losses, from 5,382 cases and N437.4 million in 2022 to 10,179 cases and N1.61 billion in 2023. This dramatic increase shows a troubling rise in both the incidence and severity of robberies.
1. Social Engineering
Despite a decrease in cases and losses from 69,110 cases and N9.38 billion in 2022 to 62,901 cases and N8.03 billion in 2023, social engineering remains the most prevalent bank fraud technique. Its high frequency and substantial financial impact make it the top concern in bank security.
