N25.85bn in 2025: NIBSS Reveals Biggest Fraud Technique in Nigerian Banks
- The NIBSS reports social engineering as Nigeria's top fraud technique despite a significant drop in losses
- Insider abuse poses the greatest threat to banks, revealing vulnerabilities in internal controls and employee access
- Lagos remains the primary fraud hotspot, highlighting the need for improved monitoring and stronger collaboration among financial institutions
The Nigeria Inter-Bank Settlement Systems has identified social engineering as the most prominent fraud technique in Nigeria’s banking and digital payments ecosystem, despite a sharp drop in overall fraud losses in 2025.
The Managing Director of NIBSS, Premier Oiwoh, disclosed this on Wednesday at an industry event in Lagos, where he presented updated data on fraud trends across banks and fintech platforms.
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According to him, fraud losses declined by 51 percent to N25.85 billion in 2025, compared with N52.26 billion recorded in 2024.
Oiwoh described the decline as significant, noting that it reflected stronger coordination across the financial system and improved monitoring tools deployed by stakeholders.
Insider abuse emerges as the biggest risk
Within the broader category of social engineering, Oiwoh said insider abuse or insider involvement poses the greatest threat to the banking sector.
According to reports, the NIBSS boss explained that investigations carried out by NIBSS and partner institutions have consistently shown a high level of internal participation in fraud incidents, either through direct involvement or weak internal controls that are deliberately exploited.
“The most common fraud technique remains social engineering. Within this category, insider abuse is the greatest threat we face. Insider involvement is high, and recent investigations have confirmed this,” Oiwoh said.
He added that staff access to sensitive systems and customer data continues to be a critical vulnerability for banks and fintech firms if not properly monitored.
E-commerce, internet banking lead fraud channels
By transaction channel, NIBSS data shows that fraud is most prevalent in e-commerce and internet banking platforms.
These are followed by point-of-sale transactions, mobile platforms, and web-based services across the Nigerian banking and fintech landscape.
Oiwoh noted that criminals are increasingly targeting digital payment channels as cashless transactions expand, adapting their tactics to exploit both technology and human behaviour.
He identified SIM swap fraud, account compromise, and phishing attacks as some of the fastest-evolving schemes in the system, stressing that fraudsters constantly refine their methods to bypass safeguards.
Awareness and coordination save N20bn
Despite the persistent threats, Oiwoh said coordinated industry action helped prevent substantial losses. He revealed that about N20 billion was saved in 2024 alone through joint efforts by banks, payment service providers, and regulators.
“Awareness remains critical, as many victims are still easily deceived,” he said, emphasising the need for continuous customer education and stronger internal compliance frameworks.
Providing historical context, Oiwoh explained that actual fraud losses stood at N17.67 billion in 2023. Losses surged to N52.26 billion in 2024, largely due to a single N31.1 billion fraud incident involving one entity. In contrast, 2025 recorded a sharp improvement.
Lagos tops fraud hotspots
Geographically, Lagos State remains Nigeria’s leading fraud hotspot, accounting for 63 percent of reported cases. It is followed by the Federal Capital Territory, Ogun, Rivers, and Delta states.
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Oiwoh urged financial institutions to prioritise internal controls, closely monitor staff activities, and sustain joint industry action, stressing that trust and collaboration among institutions are essential to keeping fraud losses on a downward path.
CBN raises alarm over new banking fraud trends
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has raised concerns over evolving fraud risks within the banking and payments sector, warning that criminals are adopting more sophisticated methods
Speaking at the 2026 Nigeria Electronic Fraud Forum (NeFF) technical kick-off session held in Lagos on Wednesday, January 21, 2026, Philip Ikeazor, CBN deputy governor for financial system stability, said continuous collaboration through the NeFF platform has significantly improved the safety and resilience of Nigeria’s payments system since its establishment in 2011.
Ikeazor, who was represented by Ibrahim Hassan, director of the development finance institutions supervision department, noted that industry-wide cooperation has helped curb fraud-related losses even as digital transactions continue to expand rapidly, TheCable reports.
Source: Legit.ng
