E-Financial
Rising Fraud Threatens Nigeria’s Digital Banking Gains — Experts
Nigeria’s fast-growing digital banking ecosystem is facing increasing scrutiny over consumer safety, as rising fraud cases and weak redress mechanisms threaten to erode public trust in the sector.
Over the past decade, Nigeria has witnessed a remarkable shift from cash-based transactions to digital financial services, driven by mobile banking applications, instant transfers and Unstructured Supplementary Service Data (USSD) platforms.
Industry data show that Point-of-Sale (POS) transactions rose to a record N18 trillion in 2024, representing a 69 per cent increase year-on-year, while the number of deployed POS terminals more than doubled to 5.5 million nationwide.
Mobile banking has also emerged as the most widely used digital financial channel, with about four in five Nigerians reportedly accessing such services within a 90-day period.
Analysts say the growth reflects significant progress in financial inclusion and technology adoption, but warn that the expansion has exposed gaps in consumer protection.
According to a 2024 Nigeria Consumer Protection Survey by Innovations for Poverty Action, nearly one in four users of digital financial services reported experiencing unexpected charges, hidden fees or fraud attempts within the past year.
The report further indicated that only about half of affected users pursued formal complaints, a trend experts attribute to declining confidence in dispute resolution processes.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) also highlight growing risks, with fraud-related losses rising to N52.26 billion in 2024.
Although the number of reported fraud cases declined, stakeholders note that the scale of losses per incident has increased significantly, suggesting more sophisticated and high-impact attacks.
Experts identify social engineering as the most prevalent fraud method, relying on deception rather than complex technology to exploit unsuspecting customers.
They also warn that insider involvement remains a critical concern, with cases of internal compromise posing systemic risks to the integrity of financial institutions.
The development, according to analysts, underscores a widening gap between the rapid expansion of digital banking infrastructure and the pace of consumer protection frameworks.
“Convenience and security must evolve together. When one outpaces the other, it creates vulnerabilities that fraudsters can exploit,” a financial analyst said.
Regulators, however, have taken steps to address the challenges.
Nigeria’s exit from the Financial Action Task Force (FATF) grey list in 2025 signalled improvements in the country’s financial safeguards.
In addition, the Central Bank of Nigeria (CBN) introduced risk-based cybersecurity frameworks for deposit money banks in 2024, setting stricter standards for managing digital risks.
Industry-wide enforcement has also intensified, with regulatory penalties reportedly exceeding N15 billion in 2024, reinforcing compliance with consumer protection rules.
Within the banking sector, institutions are increasingly investing in advanced security systems designed to monitor transactions in real time, detect anomalies and prevent fraud before it occurs.
Analysts note that such proactive measures, though largely invisible to customers, play a critical role in safeguarding digital transactions.
The experience of Union Bank of Nigeria illustrates this approach, with the bank reporting strong customer satisfaction across its digital platforms, including mobile banking, USSD services and enterprise solutions.
Observers attribute this performance to sustained investment in backend security infrastructure, proactive fraud monitoring systems and a corporate culture that prioritises customer protection.
Industry stakeholders agree that trust remains the cornerstone of banking, particularly in a digital environment where transactions are increasingly intangible.
They warn that without sustained improvements in security, transparency and accountability, the gains recorded in financial inclusion could be undermined.
As Nigeria continues to expand its digital financial ecosystem, experts say the next phase of growth must prioritise safety alongside convenience to ensure long-term sustainability.
“Digital banking has transformed access to financial services in Nigeria, but its future will depend on how well institutions protect the people who rely on it,” an industry stakeholder said.
Nigeria’s Bank Verification Number (BVN) database expanded to 69.55 million as of July 5 2026 from 69.32 million in June 2026, according to latest data released by the Nigeria Inter-Bank Settlement System (NIBSS).
BVN is an 11-digit biometric identification system introduced by the Central Bank of Nigeria and managed by the Nigeria Inter-Bank Settlement System (NIBSS) to secure customer accounts and reduce fraud.
This means that BVN enrolments increased by 228,947 between June and July 5 this year.
With the BVN database standing at 67.8 million as of December 31, 2025, it also means that the database grew by 1.75 million between the end of last year and July 5, 2026.
Specifically, with less than 1.8 million BVN enrolments so far recorded for this year, it is looking highly unlikely that BVN registrations at the end of 2026 will come close to the 4.3 million total registrations recorded in 2025.
Analysts note that while the expansion in the BVN database last year was largely driven by the introduction of the NonResident Bank Verification Number (NRBVN) initiative, which enables Nigerians in the diaspora to do their BVN enrolment remotely, thereby removing physical barriers and boosting cross-border financial engagement, the Central Bank of Nigeria (CBN) in March this year, announced a revised BVN regulatory framework, that saw it introducing stricter controls on suspected fraudulent transactions, BVN enrollment, and data access within the banking system.
According to the regulator, the amendments to the BVN framework, which came into effect on May 1, 2026, were aimed at strengthening fraud monitoring, improving identity management within the financial system and safeguarding the integrity of banking transactions, by strengthening identity verification and ensuring that BVN registration aligns with legally recognised age thresholds.
Thus, under the revised BVN framework, the apex bank introduced a stricter age requirement for BVN enrolment, limiting registration to 18-year-old individuals and above.
Also, under the new framework, customers will only be allowed to change the phone number associated with their BVN once. The CBN further stated: “Under the new guidelines, financial institutions are required to establish and maintain a temporary watch-list for BVNs linked to suspected fraudulent transactions reported within the banking system.
“A BVN may remain on this temporary Watch-list for a maximum period of twentyfour (24) hours, during which the BVN owner shall be contacted to provide clarification regarding the identified transaction(s).”
Launched on February 14, 2014, by the CBN in collaboration with the Bankers’ Committee, the NIBSS, and the German firm Dermalog, the BVN scheme was designed to capture the biometrics of all bank customers and provide each with a unique 11-digit identification number that can be verified across the Nigerian banking industry.
Central Bank of Nigeria (CBN) has reaffirmed that the standard N100 banknote remains legal tender across the country, warning that its rejection by individuals, businesses and institutions violates the law.
The clarification follows reports that some members of the public have refused to accept the standard N100 note over concerns about its legal tender status following the introduction of the commemorative N100 banknote issued to mark Nigeria’s centenary.
In a statement signed by Mrs. Hakama Sidi-Ali, acting director of Corporate Communications, the apex bank stressed that “both the commemorative N100 banknote and the standard N100 banknote are valid legal tender and must be accepted for all transactions nationwide.”
The CBN explained that the commemorative N100 note was introduced to celebrate Nigeria’s centenary and did not replace the existing standard N100 banknote.
The CBN cautioned individuals, businesses, financial institutions and other economic agents against rejecting the standard N100 note, noting that such action contravenes the provisions of the CBN Act and undermines public confidence in the national currency.
It warned that appropriate enforcement measures would be taken against any person or organisation found violating the law.
The apex bank reaffirmed its commitment to protecting the integrity of the naira, maintaining confidence in all duly issued banknotes and ensuring the smooth circulation of currency across the country.
The CBN also urged members of the public to continue accepting and transacting with all banknotes legally issued by the Bank and advised anyone seeking further clarification to use its official communication channels.
FCMB Asset Management Limited (FCMBAM), the asset management arm of FCMB Group Plc, has received an upgrade to its national scale long-term and short-term issuer ratings of A(NG) and A1(NG), from A-(NG) and A2(NG), by GCR Ratings, a leading pan-African credit rating agency.
The outlook on the ratings remains stable, said the rating agency.
The upgrade is anchored on FCMBAM’s competitive resilience and financial discipline, alongside the strengthened credit profile of FCMB Group.
GCR highlighted FCMBAM’s decade-long track record of strong performance, well-established brand franchise, diversified product suite and robust distribution network as key drivers of its standalone strength.
These are further supported by consistent earnings growth and a disciplined, unleveraged balance sheet, it said.
According to GCR, FCMBAM’s competitive position is supported by “its relatively long track record, strong brand franchise, established product and geographical distribution network and cross-selling opportunities,” with the rating agency noting that FCMBAM ranks among the top five asset managers in Nigeria, with an estimated five per cent share of a fragmented market as of 31 December.
The Company’s financial performance underpinned the upgrade, with revenue growing by 30 per cent and operating cash flow increasing by 13 per cent, enabling the business to be fully funded without recourse to debt.
Liquidity strengthened further, with liquidity sources versus uses improving to 5x as of December 2025, from 3.6x a year earlier, while the EBITDA margin edged up to over 58 per cent.
Commenting on the upgrade, the Chief Executive Officer of FCMB Asset Management, James Ilori, said: “This upgrade is an important external validation of a strategy we have pursued with discipline over many years: building an investment franchise that performs reliably, governs itself rigorously, and earns trust in every market cycle. It speaks to the strength of our membership of FCMB Group and to a culture that holds itself to local and global standards of risk management and capital stewardship.
“As Nigeria’s asset management industry enters a new era of higher capital thresholds and rising investor expectations, we intend to lead from the front – ahead of regulatory timelines, ahead in digital transformation and ahead in the outcomes we deliver for the clients who trust us to assist them in achieving their investment objectives.”
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