CBN Issues Warning on Evolving Banking Fraud Threats as Digital Transactions Increase
The Central Bank of Nigeria (CBN) has expressed serious concerns regarding the sophisticated fraud methods now targeting the country's banking and payments sector. This warning comes at a time when digital transactions are experiencing unprecedented growth across Nigeria, creating both opportunities and vulnerabilities within the financial system.
Industry Collaboration and Past Achievements in Fraud Reduction
Speaking at the 2026 Nigeria Electronic Fraud Forum (NeFF) technical kick-off session in Lagos, CBN deputy governor for financial system stability, Philip Ikeazor, highlighted the critical role of continuous collaboration through the NeFF platform. Established in 2011, this forum has significantly enhanced the safety and resilience of Nigeria's payments infrastructure through coordinated industry efforts.
Ikeazor, represented by Ibrahim Hassan, director of the development finance institutions supervision department, noted that industry-wide cooperation has successfully reduced fraud-related losses despite the rapid expansion of digital transactions. Key achievements contributing to this progress include:
- Nationwide implementation of EMV chip-and-PIN card technology
- Widespread adoption of two-factor authentication systems
- Enhanced transaction monitoring capabilities
- Centralized fraud reporting mechanisms
- Integration of bank verification numbers (BVN) with national identification numbers (NIN)
Emerging Threats Requiring Proactive Responses
The CBN official emphasized that new fraud risks demand quicker, more coordinated, and forward-looking solutions from all stakeholders. "Emerging threats such as social engineering, SIM-swap abuse, insider compromise and Authorised Push Payment (APP) scams require faster, integrated and proactive responses," Ikeazor stated during the forum.
Industry targets now include reducing fraud response times to under 30 minutes while implementing enterprise-wide fraud management systems powered by real-time data analytics and shared intelligence platforms.
Regulatory Perspectives on Sustaining Progress
Rakiya Yusuf, CBN director of payments system supervision and NeFF chairman, stressed the necessity for ongoing cooperation among regulators, financial institutions, payment service providers, and law enforcement agencies. While acknowledging progress in identity management and transaction security, she noted that emerging threats require standardized frameworks, faster intervention capabilities, and proactive utilization of ISO 20022 messaging standards alongside advanced analytics to maintain fraud reduction achievements.
Positive Trends in Fraud Loss Reduction
Premier Oiwoh, managing director and chief executive officer of the Nigeria Inter-Bank Settlement System (NIBSS), revealed encouraging data showing that electronic payment fraud losses dropped significantly in 2025 despite substantial increases in transaction volumes. This improvement has been attributed to coordinated efforts involving the CBN, Nigerian Financial Intelligence Unit (NFIU), security agencies, and industry operators, complemented by stronger monitoring mechanisms throughout the payments ecosystem.
However, Oiwoh cautioned that internet banking and e-commerce platforms remain particularly vulnerable channels, with social engineering schemes and insider-assisted fraud becoming increasingly prevalent. Sustaining current gains will require:
- Tougher internal controls within financial institutions
- Stricter regulatory compliance measures
- Deeper collaboration across the entire industry
Persistent Challenges and Future Initiatives
The NIBSS chief identified several ongoing risks to the system, including failure to report fraud incidents promptly, weak identity verification processes, and misuse of transaction limits. To address these challenges, NIBSS is working closely with the CBN and other stakeholders to deploy advanced artificial intelligence-based monitoring tools and develop new national payment infrastructure aimed at strengthening fraud prevention while simultaneously expanding financial inclusion across Nigeria.
This comprehensive approach reflects the financial sector's recognition that as digital payments continue their upward trajectory, corresponding security measures must evolve with equal speed and sophistication to protect Nigerian consumers and maintain confidence in the country's financial systems.
