…CBN directs lenders to cut fraud response time
Bank fraud has recorded its first slump since 2021, with the number of reported cases declining steadily across the industry, a trend largely attributed to the effectiveness of the Bank Verification Number (BVN) and the National Identification Number (NIN) frameworks in curbing identity-related crimes.
Reported fraud cases have declined steadily across the industry, while the total value involved in fraud dropped sharply by 51 percent, reflecting improved controls and faster response mechanisms within the banking system.
The positive trend is expected to strengthen further following a Central Bank of Nigeria (CBN) directive to lenders to reduce fraud response time from about 48/24 hours to under 30 minutes.
Philip Ikeazor, deputy governor, Financial System Stability, said fraud mitigation efforts in the banking industry have continued to evolve in response to increasingly sophisticated threat vectors. While legacy fraud such as ATM card cloning has largely been neutralised, newer risks including online fraud, social engineering, SIM-swap abuse, insider compromise and authorised push payment (APP) scams have emerged as the dominant threats.
He explained that a major driver of fraud reduction in Nigeria has been progress in identity management. The introduction of the BVN, alongside its ongoing integration with the NIN, has significantly constrained impersonation and synthetic identity fraud, closing gaps that were previously exploited by fraudsters.
Represented by Ibrahim Hassan, director, Development and Finance Institution Supervision Department at the CBN, Ikeazor spoke at the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session in Lagos.
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“Importantly, the industry has agreed to reduce fraud response times to under 30 minutes, a decisive step that materially improves recovery outcomes and limits systemic exposure,” Ikeazor said.
Data presented by Premier Oiwoh, managing director and chief executive officer of NIBSS Plc, showed that fraud incidents declined from 123,918 cases in 2021 to 101,669 cases in 2022, representing an 18 percent drop. The downward trend continued in 2023, with cases reducing further to 95,620, a six percent year-on-year decline.
In 2024, fraud cases fell sharply to 70,111, reflecting a 27 percent reduction, before easing further to 67,518 cases in 2025, representing a four percent decline compared with the previous year.
Despite the fall in incident volumes, the financial value of fraud displayed significant volatility. Losses rose from N12.77 billion in 2021 to N14.32 billion in 2022 and increased further to N17.67 billion in 2023. In 2024, the value of fraud spiked to N52.26 billion, highlighting the growing impact of fewer but higher-value fraud incidents. This moderated in 2025, with losses declining by 51 percent to N25.85 billion, although still well above levels recorded in earlier years.
Lagos remains a major fraud hub due to its cosmopolitan nature, high transaction volumes and dense financial infrastructure. Abuja and a few other cities are increasingly being used as operational bases, partly due to comparatively weaker tracking effectiveness along some corridors.
Web and mobile channels remain the leading fraud channels by volume, while Internet banking accounts for the highest fraud losses by value in the 2025 financial year. Although Internet banking recorded fewer cases at 4,507 compared with other channels, it resulted in the largest financial loss across the board, underscoring its appeal as a low-volume, high-value target.
Oiwoh said strategic actions by the NIBSS Industry Fraud Desk include fraud intelligence sharing, HAWK capacity building, regulatory flagging and escalation.
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Earlier, Rakiya O. Yusuf, director, Payments System Supervision Department and chairman of NeFF, said sustained collaboration among financial institutions, payment service providers, infrastructure operators, identity management agencies, law enforcement and other stakeholders have delivered meaningful progress in fraud mitigation, even as electronic transactions expand rapidly under the cashless policy.
Social engineering, often aided by insider collusion, has emerged as the dominant systemic threat by both volume and value, indicating that fraud risk is increasingly driven by human manipulation rather than technical system compromise. While card theft and robbery still record material volumes, their financial impact remains significantly lower than that of social engineering.
The trend suggests high success rates per incident of social engineering, largely because such attacks exploit customer-initiated transactions and bypass authentication through deception.
Oiwoh called for strengthened customer awareness, particularly through radio jingles, the prioritisation of anti-social engineering internal controls by individual institutions, and consistent joint industry action to combat the menace.
He also noted that the number of institutions reporting actual fraud incidents declined from 45 in the second quarter (Q2) of 2024 to 34 in the fourth quarter (Q4) of 2025. According to him, this decline signals potential underreporting, which undermines effective fraud monitoring and data accuracy.
“Fraud reporting to the Industry Fraud Desk at NIBSS is a mandatory requirement for our collective good. Penalties for non-compliance need to be enforced to protect the ecosystem,” Oiwoh said.
He called on all stakeholders to deepen collaboration and intelligence sharing with law enforcement to speed up fraud detection and recovery efforts, urging industry players to fully leverage and optimise the HAWK fraud management tool. He also stressed the need for strong regulatory oversight to drive the right behaviour across the industry and close persistent reporting gaps.