Economy and Business

N14.71 billion lost in five years as fraud increases in Nigeria’s banking sector

The Nigerian banking sector has suffered significant financial losses due to a marked increase in fraudulent activities over the past five years.

According to a report by SBM Intelligence, an Africa-focused research firm, financial losses from fraud surged by N14.71 billion between 2019 and 2023.

The report, published on Thursday, provides a comprehensive analysis of the rise in fraud-related losses.

It reveals that while the number of fraud incidents has slightly decreased from its peak in 2021, the amount of money lost has risen sharply. This trend suggests that perpetrators have become more adept at executing larger-scale frauds undetected.

In 2019, the sector reported 44,947 fraud incidents, resulting in losses of N2.96 billion. The figure more than doubled in 2020, with 101,624 cases leading to losses of N11.61 billion. The trend continued upward in 2021, with 123,918 fraud cases causing losses of N12.77 billion.

Although the number of fraud cases slightly decreased to 101,669 in 2022, financial losses escalated to N14.32 billion. By 2023, incidents further declined to 95,620, yet total losses soared to an unprecedented N17.67 billion.

The various methods used to perpetrate fraud include social engineering, website/server hacking, robbery, PIN compromise, internal collusion, phone theft, and SMiShing (SMS phishing).

Other methods contributing to the total losses in 2023 included fake assistance, missing/lost cards, phishing, lack of two-factor authentication (2FA), and card theft.

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