E-Financial
PalmPay’s Efforts at Curtailing Cyber Fraud: Two Sides of the Same Coin
The financial inclusion rate in Nigeria has improved. Since the country adopted an inclusion strategy in 2012, adult Nigerians with a bank account have increased, and now account for more than two-thirds of the financially included.
According to the 2023 Report on Access to Financial Services in Nigeria, financial inclusion continues to expand and has so far been fueled by marginal growth among the country’s banked population and major gains in non-bank formal adoption.
Although approximately 40 million adult Nigerians remain formally excluded, formal financial inclusion was said to have grown from 56% in 2020 to 64% in 2023.
In the last four years, fintech companies in Nigeria have played a vital role in closing this gap, bringing financial services to the country’s unbanked and driving economic growth. Their successes, however, have not come without challenges.
Following the penetration of digital payment platforms in Africa, a fraud epidemic has plagued the fintech ecosystem in Nigeria, with Mobile, Web and POS being the most exploited channels by fraudsters in the country in 2023.
According to the 2023 NIBSS Annual Fraud Landscape report, incidents of “Fraud loss via Internet Banking increased by 325% between 2022 and 2023.”
The rise of digital payment platforms in Nigeria has increased the potential for cyber fraud, with fintech companies now forced to balance between making payment apps user-friendly and prioritising users’ safety to stem increased cyber fraud.
Fintech Side of the Coin
To address the fraud epidemic, the Fintech Association of Nigeria (FintechNGR) plans to unveil a fraud reporting framework sometime this year, while fintech platforms such as PalmPay continue to take the initiative to reevaluate their in-app safety features to protect their users from the activities of fraudsters.
Since launching in Nigeria in 2019 under a Mobile Money Operator (MMO) licence by CBN, PalmPay has grown to over 30 million users as part of its payment ecosystem.
In building a user-friendly app, PalmPay has also sought to foster a secure financial ecosystem by integrating safety features into its app so that the millions of users who transact with the app do so in a safe and trusted environment.
In general, PalmPay employs a closed-loop risk management system that involves continuous monitoring, analysis, and response to fraud threats and allows it to detect and prevent security risks in real-time and reduce the potential impact of fraud.
In particular, to reduce incidents of fraud, protect their users from fraudsters, and provide a safe banking environment, PalmPay binds their users’ phones to the app and has an auto-logout and biometrics feature to confirm users’ identity.
PalmPay Safety Features
Chika Nwosu, Managing Director, PalmPay, said the reason why the fintech platform has witnessed astonishing growth in four years was because “We prioritise the safety and security of our users.” He said they’ve been able to achieve this by “marrying security and safety with the customer experience to create a balance.”
Because it understands that curtailing fraud is a two-way street, PalmPay runs a Wallet Safety Workshop to teach users of its app and POS machines various security topics covering payment security and common security issues in daily life, such as password management, fraud detection, phishing and risk identification.
The safety workshop underscores PalmPay’s understanding of user security as an important part of curtailing fraud and encourages its users to ensure that they always secure their wallets using the several built-in safety features in its app.
A recent example was a series of campaigns encouraging its users to link their wallets with their BVN or NIN, following the directive by the Central Bank of Nigeria (CBN) for users of fintech platforms to link their wallets with their BVN or NIN.
To encourage the users to meet the CBN deadline of January 31, 2024, PalmPay introduced an incentive payment system where up to N500 was paid to users who got ahead of the deadline and validated their wallet information.
PalmPay users have several options for protecting themselves against fraudsters such as the two-factor verification process that makes it difficult for fraudsters to gain access to users’ apps without spooking them. In the first half of 2023, millions of users linked their secure email addresses to their PalmPay app. With this feature, PalmPay users effortlessly receive OTPs for their in-app login.
The PalmPay app has a device management feature that allows users to manage trusted devices and remove untrusted devices. When logging in on an untrusted device, users complete a comprehensive security verification process that involves inputting an OTP and their PIN to ensure security.
Role of PalmPay Users
While fintech companies play a role in protecting users from cyber fraud, the rising fraud incidents in Nigeria can sometimes be due to poor digital and financial literacy, but most especially the failure of many victims to report an attack.
In a report last year, Temitayo Oduwole, Head of IT and Payments, PalmPay, observed that customers do not take prompt action in incidents of fraud and that “Only 33 per cent report the same day or take the necessary right action on the same day.”
Effective investigation into incidents of fraud begins when the user reports to their bank that fraud has occurred. However, fraud, if not reported within the hour the crime occurred, allows criminals to move the stolen funds to ‘safe’ places.
Precaution remains the best remedy to protect oneself from cyber fraud. Anti-fraud expert Tosin Adenekan warned fintech users against trusting strangers with their personal information when performing digital transactions.
According to Mrs Adenekan, “Users of fintech platforms owe it to themselves to follow standard safety precautions to avoid being defrauded by cyber criminals.
“Do not allow strangers such as POS operators to handle personal ATM cards. This is because cybercriminals often posing as helpful POS operators can exploit this to observe PIN entries and distract card owners, ultimately swapping ATM cards.”
She urged fintech users to “take steps to reduce incidents of fraud on their wallets by creating strong passwords, enabling the two-factor authentication features on their fintech app, monitoring their wallets for unauthorised transactions, and protecting their personal login information when in public from prying eyes.”
Other steps to take include “regularly updating their apps, setting limits for their wallets, staying alert for phishing attempts, getting the proper financial education, using secure internet connection, being aware of pop-ups and fraudulent emails, and ensuring that operating systems and internet connections are up to date.”
To prevent falling victim to cyber fraud, Mrs Adenekan urged fintech users to adhere to these safety guidelines and “don’t trust everything on the internet.”
The Bank of Industry, through BOI Financing SPV Plc, has opened subscriptions for its inaugural Series 1 Fixed Rate Bond worth up to N250bn under its $1bn multi-currency instruments programme, seeking to raise long-term capital to finance businesses across Nigeria’s priority sectors.
The offer, which opened on 5 August and closes on 11 August, is being arranged by Chapel Hill Denham as the lead issuing house. The five-year bond is priced within a yield range of 17.35 per cent to 17.50 per cent and will be listed on the FMDQ Securities Exchange.
According to the offer document, proceeds from the issuance will be deployed to finance eligible businesses and projects across sectors, including agriculture and food processing, healthcare, engineering and technology, renewable energy, petrochemicals, oil and gas, creative industries and solid minerals, in line with BOI’s development finance mandate.
The lender said the financing is expected to improve access to medium and long-term funding for Nigerian enterprises, expand productive capacity, create and preserve jobs, deepen local value addition, support import substitution, boost exports and strengthen domestic value chains.
BOI, Nigeria’s foremost development finance institution, said it has provided funding to more than one million businesses across the country and disbursed over N1.27tn between 2023 and 2025. The institution operates across 34 states and the Federal Capital Territory and is jointly owned by the Ministry of Finance Incorporated and the Central Bank of Nigeria.
The bank also highlighted its financial performance, reporting a 36 per cent compound annual growth rate in gross earnings between 2021 and 2025.
Interest income rose 64 per cent to N884bn in 2025 from N538bn in the previous year, while its capital adequacy ratio stood at 39 per cent, nearly four times the regulatory minimum of 10 per cent. Its non-performing loan ratio was 1.7 per cent, below the CBN’s prudential limit of five per cent.
The bond has been assigned AAA ratings by Agusto & Co. and Intelligence Africa, reflecting the issuer’s strong capitalization, profitability, liquidity and ownership structure.
The issuance is open to institutional and qualified investors with a minimum subscription of N5m and additional investments in multiples of N1m. Interest will be paid semi-annually at a fixed rate, while principal repayment will begin in the third year through equal semi-annual amortised instalments until maturity in 2031.
The bond is also exempt from tax, making it an attractive investment option for investors seeking stable returns amid expectations of declining interest rates.
E-Financial
SEC Unveils Probate/Unclaimed Monies Clinic to Help Families Recover Inherited Investments
Securities and Exchange Commission (SEC) has intensified efforts to reduce unclaimed funds and other dormant investment assets by launching a Probate/Unclaimed Monies Awareness and Investor Clinic aimed at helping beneficiaries recover inherited investments and strengthening investor protection in Nigeria’s capital market.
Speaking at the opening of the clinic in Abuja organised by the Commission in partnership with Meristem on Thursday, Dr. Emomotimi Agama, director-general, SEC, said the initiative was designed to bridge the gap between investors’ legal entitlements and their ability to access inherited assets.
He noted that many Nigerian families face prolonged delays in accessing shares, dividends and other investments after the death of loved ones because they are unfamiliar with probate procedures, documentation requirements and registrar processes.
“For many Nigerian families, the death of a loved one who held shares, dividends, or other investments marks the beginning of a long and often confusing journey,” Agama said.
Describing unclaimed funds and dormant assets as a persistent challenge, he said they represent “real money that belongs to real families, sitting idle, disconnected from the people it was meant to serve.”
According to him, the Commission is committed to closing the gap through policy initiatives and direct engagement with investors.
He explained that the clinic brought together the Federal Ministry of Justice, the Probate Registry, the National Population Commission and capital market registrars to provide practical guidance on probate procedures, required documentation and the recovery of inherited investments.
“Today is not simply an awareness session. It is a working clinic, designed to equip you with practical knowledge: how probate works, how to obtain the right documentation, and how to recover what is rightfully yours,” he said.
Agama stressed that SEC’s mandate to protect investors extends beyond the lifetime of shareholders.
“This Commission exists to protect your rights in the capital market, and that protection does not end when a shareholder passes on. It extends to ensuring their beneficiaries can access what is due to them without unnecessary hardship,” he added.
Also speaking, Ms. Nkechinyelu Okoye, acting chief executive officer, Meristem Registrars and Probate Services Limited, identified lack of awareness and poor estate planning as key reasons billions of naira in financial assets remain unclaimed.
“There are three categories of beneficiaries that we encounter quite often. The first are those who think only land, houses and other physical assets can be transferred legally from deceased loved ones. They do not realise that financial assets such as shares, fixed income investments and even money in savings apps also form part of an estate,” she said.
Okoye said another group consists of beneficiaries who are unaware their deceased relatives owned financial assets, while a third group knows the investments exist but does not understand the claims process or required documentation.
“I dare add a fourth category. These are investors who do not provide or update their KYC documents and, as a result, when they pass on, their loved ones have no idea they have investments to claim,” she said.
According to her, these factors have contributed to the rising volume of unclaimed dividends, dormant accounts and other abandoned financial assets.
“All of these categories contribute to the several unclaimed assets lying all around. Ultimately, financial resources that could have been beneficial to these beneficiaries remain inaccessible,” she said.
She described the investor clinic as more than an awareness programme, saying it would provide practical support to investors, beneficiaries, executors and administrators.
“Our goal is to empower investors, beneficiaries, executors, administrators and the general public with the knowledge they need to navigate probate and estate administration with greater confidence,” Okoye said.
She also urged investors to prepare valid wills, maintain accurate shareholder records and regularly update their Know Your Customer (KYC) information to make it easier for beneficiaries to access inherited investments.
“We want investors to appreciate the importance of preparing a valid Will, maintaining accurate shareholder records and ensuring that their affairs are properly organised. Taking these simple steps today can save families considerable stress and delay in the future,” she added.
The SEC said the clinic forms part of its broader investor protection strategy and provides participants with direct access to experts on tracing investments, verifying shareholder records, resolving probate-related issues and recovering unclaimed capital market assets.
Nigeria Deposit Insurance Corporation (NDIC) has reassured on the multiple layers of protection for the Nigerian banking industry with more than 98 per cent of depositors and 281 million accounts insured by the corporation.
Thompson Sunday, managing director, NDIC, gave the assurance in Lagos at the retreat for members of the House Of Representatives Committee on Insurance and Actuarial Matters.
He said that striking the right balance between innovation, consumer protection, and financial stability remains a key policy imperative.
The theme of the retreat was “Strengthening the Financial Safety Net in an Era of Banking Sector Recapitalisation and Fintech Innovation”.
He said the increasing digitisation of financial services has heightened exposure to cyber threats, fraud, data breaches, and operational risks.
He said that with banks’ adoption of emerging technologies, regulators and safety-net participants must remain proactive in identifying and mitigating these risks while encouraging innovation.
Sunday also highlighted the rapid growth of financial technology (fintech) which has revolutionised the way financial services are delivered.
He said: “Digital banking platforms, mobile money services, payment solution providers, and other fintech innovations have expanded access to financial services and accelerated progress toward financial inclusion. Millions of previously unbanked and underserved Nigerians now have access to formal financial services through digital channels”.
He said that as the banking industry adjusts to higher capital requirements and technological innovations reshape financial service delivery, adding that its imperativefor banks to reinforce rules that safeguard financial stability and protect depositors’ funds.
According to him, a strong and well-coordinated financial safety net system is necessary for maintaining stability and resilience in any modern financial system.
“It promotes public confidence, protects depositors, supports orderly resolution of distressed financial institutions, and helps prevent systemic crises. At a time when Nigeria is pursuing ambitious economic growth objectives, including the goal of attaining a one trillion-dollar economy in 2030, a robust and credible financial safety net is essential to maintaining depositors’ and investors’ confidence and enhancing financial system resilience,” Sunday said.
He said the recently concluded banking sector recapitalisation programme represents a significant milestone in strengthening the capacity of Nigerian banks to support economic development.
“Well-capitalised banks are better positioned to absorb shocks, finance large-scale investments, support enterprise growth, and withstand periods of economic uncertainty. However, while recapitalisation enhances the resilience of financial institutions, it must be complemented by effective regulation, sound governance practices, strong risk management frameworks and good compliance culture, all attribute of a reliable financial safety net,” Sunday said.
He said the stability of the financial system depends largely on the trust that depositors and investors place in financial institutions.
He said: “History has shown that where confidence is low, distress can spread rapidly, threatening the stability of, not only the financial system but the wider economy. It is, therefore, essential that institutions responsible for financial stability continue to strengthen measures that preserve and enhance public trust.
Also speaking, opening remarks, Ahmadu Usman Jaha, chairman, House Committee on Insurance and Actuarial Matters, said financial systems across the globe are being reshaped by rapid technological advancement, digital financial services, artificial intelligence, cybersecurity risks, and changing customer expectations.
He said Nigeria is undertaking one of the most significant banking recapitalisation exercises in its recent history, requiring banks to strengthen their capital base while remaining innovative, resilient and competitive.
“These developments present enormous opportunities for economic growth, financial inclusion and innovation. However, they also introduce new categories of systemic risks that require stronger institutions, modern regulatory frameworks, and robust financial safety nets capable of maintaining public confidence under all circumstances,” he said.
He explained that Nigeria’s banking industry continues to occupy a central position in our economy with banking sector assets running into several trillions of naira and serving tens of million of depositors across conventional banking channels and rapidly expanding digita platforms.
“Equally important is the rapid expansion of financial technology. While fintech innovation has significantly increased financial inclusion and payment efficiency, it also raises complex issues relating to cyber resilience, operational risk, consumer protection, digital fraud, and the scope of deposit insurance coverage. These are issues that require continuous legislative attention and collaborative policy responses,” he stated.
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