Financial institution fraud continues to be a essential concern in Nigeria, impacting many via numerous methods that result in important monetary losses.
The Nigeria Inter-Financial institution Settlement System (NIBSS) 2023 Annual Fraud Panorama reveals an alarming development in worldwide fraud actions concentrating on Nigerian banks’ prospects.
The monetary panorama in Nigeria has seen a considerable rise in fraud incidents over the previous 5 years, intently monitoring the growth of monetary transactions inside the digital funds sector.
Particularly, the annual fraud depend has surged by 112%, from 44,947 instances in 2019 to 95,620 in 2023. Concurrently, the monetary losses attributed to fraud have escalated dramatically by 496%, hovering from N2.9 billion in 2019 to N17.67 billion in 2023.
Additionally, the ratio of whole reported fraud worth to the full worth of transactions during the last 5 years has proven a slight improve, from 0.0019% in 2019 to 0.0022% in 2023. These statistics underscore the rising problem and complexity of combating fraud in a quickly evolving digital financial system.
Beneath are the highest 10 financial institution fraud methods in Nigeria by variety of instances and loss worth for 2023:
10. SMSishing
SMSishing, although nonetheless comparatively uncommon, has seen an explosive improve in frequency and monetary impression, rising from simply 19 instances in 2022 to 222 in 2023. The loss worth additionally surged from N1.01 million in 2022 to N30.7 million in 2023, indicating the rising effectiveness and attain of those scams.
9. Pretend Help
The variety of faux help scams virtually halved from 931 to 419, but the monetary losses soared from N133 million in 2022 to an astonishing N1.01 billion in 2023. This stark improve in losses regardless of fewer instances suggests that every incident has grow to be considerably extra damaging.
8. Lacking/Misplaced Card
With a loss worth of N122.2 million (down from N135.2 million in 2022), incidents of lacking or misplaced playing cards have decreased considerably, from 993 instances in 2022 to 525 in 2023, with a slight discount in related monetary losses as effectively. This development would possibly mirror higher safety practices and shopper consciousness round safeguarding financial institution playing cards.
7. Lack of 2FA (Two-Issue Authentication)
The sharp lower in instances missing two-factor authentication—from 5,227 to 1,733—suggests improved adoption of this safety measure. Nonetheless, the rise in whole loss worth from N137.8 million to N192.3 million signifies that the remaining incidents are extra pricey.
6. Telephone Theft
Telephone theft exhibits a modest improve in each instances and monetary 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 necessity for enhanced cell safety options.
5. Phishing
Phishing has tripled in frequency and greater than doubled in loss worth, marking a major rise from 1,667 instances and N240.6 million in losses in 2022 to 4,457 instances and N551.2 million in 2023. This surge highlights an alarming improve within the effectiveness and frequency of phishing assaults.
4. PIN Compromise
PIN compromise stays comparatively regular in prevalence however has seen a major rise in monetary impression, with losses rising from N852.3 million in 2022 to N1.3 billion in 2023. This means that every incident is changing into extra profitable for fraudsters.
3. Card Theft
Though card theft instances and related losses have decreased—from 9,988 instances and N916.3 million in 2022 to six,825 instances and N658.8 million in 2023—the method stays a major menace, suggesting ongoing challenges in card safety.
2. Theft
Robberies have greater than doubled in frequency and practically quadrupled in monetary losses, from 5,382 instances and N437.4 million in 2022 to 10,179 instances and N1.61 billion in 2023. This dramatic improve exhibits a troubling rise in each the incidence and severity of robberies.
1. Social Engineering
Regardless of a lower in instances and losses from 69,110 instances and N9.38 billion in 2022 to 62,901 instances and N8.03 billion in 2023, social engineering stays essentially the most prevalent financial institution fraud method. Its excessive frequency and substantial monetary impression make it the highest concern in financial institution safety.