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ABUJA – Nigeria’s banking industry recorded a remarkable decline in electronic payment fraud losses in 2025, but beneath the encouraging figures lies a more disturbing reality: fraudsters are becoming smarter, more organised and increasingly reliant on identity theft, SIM swap attacks and artificial intelligence- powered deception to steal from unsuspecting customers.
For thousands of Nigerians, the statistics translate into devastating personal experiences that expose the vulnerabilities of the country’s fast-growing digital payments ecosystem.
It often begins quietly.
A mobile phone suddenly loses network signal. Calls no longer connect. Within minutes, debit alerts start arriving as criminals systematically empty bank accounts through unauthorised transfers. By the time victims realise what has happened, their savings have disappeared.
One such victim is Sawari Bolanle, a young mother whose GSM line was fraudulently swapped recently.
By mid-February, her phone displayed a “SIM not provisioned” message, prompting her to rush to her bank. “I was in tears,” she recalled after discovering that several unauthorised transfers had emptied her account, including two separate transfers of N50,000 to the same beneficiary.
She immediately visited her telecommunications provider seeking answers but said she received no clear explanation about how her line had been compromised. Her experience reflects a growing pattern of SIM-related financial fraud across the country.
In Ibadan, a civil engineer lost N305,000 after criminals exploited a recycled GSM number that remained linked to his Bank Verification Number (BVN).
Rather than finding justice immediately, he was later questioned by police after investigators traced fraudulent transactions to the phone number now registered in his name. In Aba, businesswoman Sarah Nkalagu purchased what she believed was a brandnew SIM card from an authorised dealer.
Within 48 hours, however, she began receiving bank alerts and loan notifications meant for another individual. Investigations later revealed that the supposedly new line had previously belonged to someone else and was still connected to that person’s financial records. Even Nigerians living abroad have not been spared.
A Canada-based Nigerian woman recently recounted waking up to repeated debit alerts from her bank account as fraudsters repeatedly withdrew N20,000 using electronic transfer codes while she desperately coordinated with relatives in Nigeria to stop the transactions.
Perhaps the most alarming case involved Titilayo Ibrahim, a National Youth Service Corps member serving in Akure, who was arrested after a phone number linked to her National Identification Number was traced to a N50 million kidnapping investigation.
Her innocence was eventually established following the intervention of activist Omoyele Sowore and confirmation from her service provider that the SIM had been legitimately activated. Nevertheless, the incident highlighted how recycled phone numbers can wrongly implicate innocent citizens in serious criminal investigations.
These personal accounts mirror broader findings contained in a new working paper by the National Institute for Legislative and Democratic Studies (NILDS) titled ‘Electronic Payment Fraud Trends in Nigeria’s Banking Sector — 2025 Data, Emerging Risks, and Legislative Imperatives’.
Authored by Ganiyu Ejalonibu, Etimbuk Obot and Livinus Nandi, the report showed that Nigerian financial institutions lost N25.85 billion to electronic payment fraud in 2025, representing a 51 percent decline from the N52.26 billion recorded in 2024. Reported fraud cases also fell to about 67,515, extending a five-year downward trend.
The researchers attributed the improvement to stronger collaboration among regulators, banks, payment service providers and law enforcement agencies, alongside wider adoption of identity management initiatives, particularly the integration of the Bank Verification Number with the National Identification Number. However, they warned that the decline should not be interpreted as victory.
According to the report, fraud is evolving from widespread low-value attacks into fewer but far more sophisticated schemes targeting internet banking, mobile channels and digital commerce.
The researchers also raised concerns over declining institutional fraud reporting, noting that reduced disclosures by some financial institutions weaken industry-wide intelligence sharing and create opportunities for fraudsters to exploit multiple institutions undetected.
Speaking during the 2026 Nigeria Electronic Fraud Forum Technical Kickoff Session in Lagos, Managing Director and Chief Executive Officer of the Nigeria Inter-Bank Settlement System (NIBSS), Premier Oiwoh, said fraud incidents had consistently declined over the past five years, but insisted the industry must remain vigilant.
He explained that while losses surged in 2024 largely because of a single N31.1 billion fraud incident, coordinated industry interventions helped reduce losses significantly in 2025.
Oiwoh disclosed that collaborative efforts across the financial sector prevented nearly N20 billion in potential fraud losses during the year.
He, however, identified insider abuse, SIM swap fraud, phishing attacks, account compromise and other social engineering techniques as the dominant threats confronting Nigerian financial institutions.
He also criticised the failure of some banks to report fraud incidents consistently, warning that institutions reporting zero fraud cases create blind spots that allow criminals to migrate undetected across the banking system.
The growing sophistication of fraud is not unique to Nigeria. According to TransUnion’s latest Africa Digital Fraud Report, financial institutions across the continent are increasingly battling organised account takeover, impersonation, social engineering and AI-enabled fraud, making digital identity verification and behavioural analytics more important than ever.
Similarly, INTERPOL’s 2025 Africa Cyberthreat Assessment found that cybercrime now constitutes a significant proportion of reported crimes across many African countries, with phishing, business email compromise, ransomware and artificial intelligence-assisted fraud becoming increasingly common.
The report stressed that stronger cooperation among governments, regulators, financial institutions and law enforcement agencies would be critical to containing emerging cyber threats. Nigeria’s telecommunications regulator has equally acknowledged the growing danger.
The Executive Vice Chairman of the Nigerian Communications Commission, Aminu Maida, has identified fraudulent use of churned, recycled, swapped and barred phone numbers as a major channel for identity theft and financial fraud.
Cybersecurity expert and Cyberchain founder, Jude Ozinegbe, explained that many attacks follow a predictable pattern: fraudsters first obtain personal information through phishing or data leaks, hijack victims’ SIM cards to intercept one-time passwords and verification codes, then gain access to banking applications to transfer funds or even obtain instant digital loans in victims’ names.
Industry stakeholders continue to disagree over where responsibility lies. While the Association of Licensed Telecoms Companies of Nigeria argues that banks are custodians of customers’ funds, banking operators maintain that weaknesses in SIM management remain a major vulnerability.
Yet both sectors broadly acknowledge that Nigeria’s identity ecosystem remains fragmented. The country’s NIN database, BVN infrastructure and SIM registration systems still operate largely as separate platforms without seamless real-time verification capable of detecting suspicious SIM changes before financial transactions are approved.
To strengthen consumer protection, the NILDS researchers urged the National Assembly to hold public hearings on electronic payment fraud, mandate quarterly fraud reporting by the Central Bank of Nigeria and NIBSS, strengthen legal backing for industry-wide fraud data sharing, improve oversight of the BVN-NIN integration programme and establish clearer rules governing complaint resolution, reimbursement timelines and liability sharing among financial institutions.
While Nigeria’s declining fraud losses represent measurable progress, experts warn that sustaining those gains will require continuous investment in identity protection, stronger regulation and closer collaboration among banks, telecom operators, regulators and security agencies to stay ahead of increasingly sophisticated digital criminals.
