Banks loss N25.85b to fraud last year, the Nigeria Interbank Settlement System (NIBSS) Plc has said in a data.
The figure, the data showed, was a crash from the N52.26 billion fraud counts recorded in 2024.
According to the data, fraud cases across the banks also dropped from 123,918 in 2021 to 67,515 in 2025.
The Central Bank of Nigeria (CBN) attributed the decline in both value and volume of fraud to the country’s progress in identity management.
CBN’s Deputy Governor (Financial System Stability), Mr. Philip Ikeazor, said the introduction of Bank Verification Number (BVN), and its ongoing integration with the National Identification Number (NIN), has significantly constrained impersonation and synthetic identity fraud.
Ikeazor spoke yesterday in Lagos at the technical kick-off session of the Nigeria Electronic Fraud Forum (NeFF), which has “Shrinking fraud losses ISO 20022 & identity management”, as its theme.
The CBN official said noted that enhanced identity verification across banking, agent networks and high-risk digital channels is steadily closing gaps previously exploited by criminals.
In his keynote remarks, Ikeazor said: “This reinforces the critical role of identity infrastructure as a foundational control for payment system integrity, with NIMC remaining a key partner in strengthening fraud prevention going forward.”
Managing Director of the NIBSS Plc, Premier Oiwoh, said that, despite the decline, digital payments fraud in Nigeria has grown in scale, speed, and sophistication, driven largely by increased adoption of instant and remote banking channels.
He said that Lagos remains a major fraud hub due to its cosmopolitan nature, high transaction volumes, and dense financial infrastructure.
Oiwoh, however, noted that Abuja and a few other cities are increasingly being used as operational bases because of the comparatively weaker tracking effectiveness along some corridors.
Oiwoh advised banks to watch lifestyle of bankers, which could serve as red flag on fraud detection.
He said: “Banks no longer watch the lifestyle of their staff. What we have today is constant celebration of success in the sector.”
NIBSS, he said, has maintained person of interest portal, where repository of fraudsters, watch-listed individuals, politically exposed persons (PEPs) & CBN’s black book of fraudulent ex- staff of banks and other financial institutions are kept.
Oiwoh said 114,000 PEPs and nearly 14,000 fraudsters are listed in the person of interest portal.
He said that web and mobile remain the major fraud channels by volume, while internet banking is the major fraud channel by value for fiscal year 2025.
“Internet banking with fewer cases of 4,507 compared to other channels resulted in the largest financial loss across board – signaling a low volume yet high value target,” Oiwoh said.
He pointed out that the evolving fraud landscape requires a centralised, data-driven approach to detect patterns early and protect the entire system.
The NIBSS boss said social engineering, also aided by insider collusion, is the dominant systemic threat by volume and value, indication that fraud risk is increasingly driven by human manipulation rather than technical system compromise.
He said the number of institutions that reported actual fraud incidents declined from 45 in second quarter of 2024 to 34 in fourth quarter of last year.
Oiwoh expressed concerns that the decline in reporting institutions might signal potential underreporting, which could undermine fraud monitoring and data accuracy.
He said: “Fraud reporting to the industry fraud desk at NIBSS is a mandatory requirement for our collective good. Penalties for non-compliance need to be enforced to protect the ecosystem”.
Ikeazor outlined that the banking industry’s migration to ISO 20022 has been equally transformative, noting that beyond compliance, ISO 20022 provides richer, structured transaction data that enhances traceability, analytics, and early fraud detection.
“As banks, payments service and infrastructure providers complete implementation across real time gross settlement and instant payment systems, it is expected that data quality and transparency will improve materially, enabling faster investigation, better pattern recognition, and more effective cross-border cooperation.
“This alignment with global standards, positions Nigeria to confront increasingly sophisticated fraud schemes with modern, data-driven tools,” Ikeazor said.
He said the industry must commit to bold, measurable fraud-reduction targets, supported by clear strategic priorities.
According to him, these priorities include full exploitation of ISO 20022 data, universal and real-time identity verification, enhanced 24/7 fraud monitoring and response, structured liability-sharing and consumer reimbursement frameworks.
He also underlined the need for deeper engagement with payment service providers and telecoms, and rigorous performance measurement through transparent scorecards.
“What gets measured, must be improved,” Ikeazor said.
Director, Payments System Supervision Department/Chairman, NeFF, Dr. Rakiya Yusuf, said key milestones in fraud reduction journey included the migration to EMV chip-and-PIN cards, the introduction of two-factor authentication for electronic channels, enhanced consumer protection measures, and the institutionalisation of fraud information-sharing across the industry.
She said: “These interventions translated into measurable reductions in fraud losses in earlier years and helped preserve public confidence in digital payments during periods of rapid growth.
“More recently, improvements in identity management, particularly the rollout of the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN), have significantly reduced impersonation and the use of false identities for fraud closing long-standing gaps exploited by criminals across both banking and agent networks.”
