As digital financial services continue to grow globally, cyber threats are becoming more advanced, more automated, and more financially damaging. In Nigeria, where digital payments are becoming a part of everyday life, these threats pose significant risks to both consumers and financial institutions.

Industry reports continue to show that account takeover remains one of the dominant fraud issues in Nigeria, accounting for a significant share of 43% banking-related losses reported to Nigeria Inter-Bank Settlement System (NIBSS). Between early 2023 and mid-2025, the financial sector is estimated to have lost hundreds of billions of naira to digital fraud, while 281,500  user accounts have been exposed through breaches and leaks in Q1 alone.

Responding to this kind of threat environment requires more than a single line of defence. It requires a broader security model that combines intelligence, automation, identity verification, and ecosystem collaboration.

PalmPay, leading digital payments platform, has built its cybersecurity framework on a multi-layered security architecture designed to anticipate, detect, and mitigate risks before they escalate. Rather than relying on a single line of defence, PalmPay integrates AI-driven fraud monitoring, continuous risk assessment, behavioural analysis, and multi-layer authentication to strengthen account protection.

One important part of this approach is biometric and facial verification. As account takeover attempts increasingly exploit stolen credentials, identity verification has become one of the most effective tools in combating fraud. By combining facial verification with PIN and OTP authentication, PalmPay introduces multiple layers of protection that help ensure access is tied to the legitimate account owner, significantly reducing the risk of unauthorized access.

Complementing this is PalmPay’s Fraud Case Management System that enhances how potential fraud incidents are detected, analysed, and managed. By centralising fraud intelligence and enabling faster response times, the system helps security teams identify emerging patterns and intervene more proactively.

PalmPay’s Anti-Fraud Manager, Omoruyi Aiyudu, commented: “Fraud prevention today requires a shift from isolated security controls to a connected, intelligence-driven security ecosystem. At PalmPay, we leverage AI-driven fraud detection, behavioural analytics, and multi-layered authentication to identify and mitigate risks in real time. We continue to invest in advanced technologies to strengthen account security and build a safer, more resilient digital financial ecosystem for our users.”

Ecosystem Collaboration

Cybersecurity does not stop at internal controls. Stronger outcomes also depend on collaboration across the wider financial ecosystems.

PalmPay continues to work with regulators, law enforcement agencies and other stakeholders to support stronger cybercrime detection and response capabilities. One example is collaboration with the Nigerian Cybersecurity Unit of the Nigeria Police Force (NPF), including support through the provision of advanced equipment designed to enhance fraud detection and investigation capacity.

The company also recently collaborated with the Nigerian Data Protection Commission on a specialized data protection training to enhance internal data governance practices and advance compliance with the Nigeria Data Protection Act (NDPA) 2023.

These efforts reflect a broader view of security, one that recognizes that customer protection depends not only on technology, but also on governance, institutional cooperation, and responsible data handling.

PalmPay also believes that effective cybersecurity requires active participation from every stakeholder in the digital ecosystem. This is why user awareness remains an important part of its approach. Technology can reduce risk, but informed behaviour remains one of the strongest protections against fraud.

As cyber threats continue to evolve, the future of cybersecurity will depend on organisations adopting intelligent, adaptive, and collaborative security models. AI-led security solutions are no longer optional; they are becoming essential to staying ahead of increasingly sophisticated threats, strengthening customer trust, and the digital economy.

Galaxy Backbone (GBB) Limited has mapped out strategies to strengthen Nigeria’s digital infrastructure in order to make the country globally competitive in the face of Artificial intelligence, blockchain, cloud computing and other emerging technologies aimed at securing the digital future of the country.

Prof Ibrahim Adeyanju, managing director and CEO of GBB, made this known during a press conference to unveil a flurry of activities to celebrate the 20th anniversary of GBB in Abuja on Monday, stressing that Galaxy Backbone has evolved from a connectivity provider into one of Nigeria’s most strategic digital infrastructure institutions.

Galaxy Backbone is a public enterprise of the Federal Government of Nigeria incorporated in 2006 with the primary mandate of setting up and operating a unified Information and Communication Technology (ICT) infrastructure platform that addresses the connectivity, transversal and other technology imperatives for Ministries, Departments and Agencies (MDAs) of the federal government and private entities.

He said in the last 20 years, the agency has invested in world-class data centre infrastructure, including uptime certified Tier III and Tier IV facilities that provide secure, resilient and reliable environments for hosting missions critical to systems and applications.

He noted that these facilities strengthen data sovereignty, ensure business continuity and help keep Nigeria’s most critical digital assets secure.

“Through our cloud infrastructure and the 1Government Cloud platform, government institutions can access scalable digital services without the burden of building costly infrastructure independently. This shared-services model improves efficiency, reduces costs and accelerates innovation.

“We have delivered platforms such as GovMail (the homegrown Official government email), collaboration tools, hosting services, connectivity solutions and shared applications that support thousands of public servants and hundreds of institutions every day,” he said.

He emphasized that the true value of Galaxy Backbone is not measured by kilometres of fibre, data centres or technology alone but by impact.

He explained that the GBB fibre infrastructure today spans almost 30 states of the federation, connecting government institutions and creating the foundation for digital government even as he pledged that the remaining states and local areas will all be captured in due course.

On cyber security, the GBB boss noted that the agency has strengthened cybersecurity capabilities and continues to invest in protecting government systems and critical national digital assets, against cyber-attacks.

“We have the digital infrastructure and we are collaborating with partners to use these emerging technologies. We also have a top tier cyber security operation center and they are multilayered such that even when there is a spike in cyber-attacks none of them have been successful so far.

He added that the GBB is collaborating with other government agencies like the National Security Adviser, The Nigeria Police, and Nigerian Communications Commission (NCC) National Information Technology Development Agency (NITDA) National Identity Management Commission (NIMC) to ensure that government information is protected.

Ibrahim Sani Mohammed, executive director Finance and Corporate Services of the GBB, while fielding questions noted that the agency has created enormous value and has contributed immensely in the digital ecosystem of Nigeria helping to support small and medium enterprises (SMEs).

Olusegun Olulade, executive director Customer Centrality and Marketing of the GBB, said that customers have remained the formidable partners in the GBB journey of 20 years, adding that the agency has developed the mechanism to ensure customer satisfaction as it intensifies efforts to build trust.

Nigerian banks are increasingly embracing artificial intelligence (AI) to improve customer service, strengthen fraud detection, and streamline operations.

Pic credit….gdprlocal.com

However, the same technology driving innovation could also expose the country’s financial system to unprecedented cyber risks, according to a recent warning from the International Monetary Fund (IMF).

The IMF has cautioned that advanced AI tools are rapidly enhancing the capabilities of cybercriminals, making it easier and faster to identify and exploit vulnerabilities in banking systems, payment infrastructure, and digital platforms.

For Nigeria, where digital banking transactions have surged in recent years and financial institutions are becoming more interconnected, the implications could be significant.

The warning comes at a time when Nigerian banks are investing heavily in digital transformation.

From AI-powered customer support systems to automated fraud monitoring tools and digital lending platforms, financial institutions are relying more than ever on technology to drive growth and improve efficiency.

Yet experts warn that this digital expansion is also widening the attack surface for cybercriminals.

The IMF noted that advanced AI models can dramatically reduce the time and expertise required to discover software vulnerabilities.

This means attackers can launch more sophisticated and coordinated cyberattacks against multiple institutions simultaneously.

For Nigeria’s banking sector, which depends on common payment rails, cloud infrastructure, telecommunications networks, and shared service providers, a major cyber incident could quickly spread across the financial ecosystem.

Nigeria’s financial sector has undergone a remarkable digital revolution over the past decade.

Data from the Central Bank of Nigeria (CBN) show that electronic payments now account for trillions of naira in monthly transactions, driven by mobile banking, instant payments, fintech innovation, and the growing adoption of digital channels.

The success of platforms such as the Nigeria Inter-Bank Settlement System (NIBSS) Instant Payments network has made banking more accessible and efficient.

However, it has also increased dependence on interconnected digital infrastructure.

According to the IMF, this interconnectedness creates systemic vulnerabilities.

A cyberattack targeting a critical service provider, cloud platform, telecommunications network, or payment gateway could disrupt services across multiple banks at the same time.

Unlike traditional bank robberies or isolated cyber incidents, AI-enabled attacks have the potential to trigger widespread operational disruptions, affecting payment processing, customer access to funds, and confidence in the banking system.

The IMF warns that extreme cyber incidents could evolve from operational challenges into broader financial stability concerns.

If multiple banks are simultaneously affected by a cyberattack, customers may experience service outages, delayed transactions, or restricted access to deposits.

Such disruptions could undermine public confidence and create liquidity pressures, especially if panic withdrawals or transaction bottlenecks occur.

The concern is not merely theoretical.

Over the past few years, Nigerian financial institutions have experienced increasing levels of cyber fraud, phishing attacks, identity theft, and ransomware threats.

Although regulators and banks have improved cybersecurity frameworks, AI-driven attacks could significantly raise the sophistication and scale of these threats.

The IMF believes that the growing concentration of technology services could further amplify the risks.

Many Nigerian banks rely on a relatively small number of software vendors, cloud providers, telecommunications operators, and payment infrastructure providers. A successful attack on one critical provider could have cascading effects across the entire banking system.

This concentration risk is becoming more pronounced as financial institutions increasingly adopt AI solutions from a limited number of global technology companies.

Despite the risks, AI is also emerging as one of the most powerful tools available to banks in defending against cyber threats.