In a sobering revelation, the Nigeria Inter-Bank Settlement System (NIBSS) has unveiled that financial institutions in Nigeria incurred staggering losses amounting to N17.67 billion due to fraud in 2023.
This alarming statistic, outlined in the Annual Fraud Landscape report released by NIBSS on Monday, underscores the persistent threat posed by fraudsters in the financial sector.
Established in 1993, NIBSS plays a pivotal role in facilitating same-day clearing and settlement of inter-bank transfers and payments across the country. However, despite its efforts to ensure secure transactions, the report reveals a concerning trend of escalating fraud incidents.
While the fraud count decreased marginally by six per cent to 95,620 cases, the actual financial loss surged by 23 per cent compared to the previous year. The report highlights the first quarter of 2023 as witnessing the highest volume of fraud incidents, with the fourth quarter registering the highest monetary losses.
Among the key findings, the month of May stood out with the highest fraud count, recording 11,716 cases, followed closely by February with 9,492 cases.
In terms of monetary loss, October emerged as the costliest month for financial institutions, with fraudsters siphoning off a staggering N3.7 billion, closely trailed by January with N2.7 billion in losses.
The report identifies the mobile channel as the preferred avenue for fraud, witnessing a five per cent increase compared to the previous year.
Additionally, the Web and Point of Sale (POS) channels emerged as the most exploited payment channels by fraudsters in 2023, indicating evolving tactics employed by criminals to defraud unsuspecting victims.
Alarmingly, individuals aged 40 and above remained the primary targets of fraudsters, highlighting the need for continuous education and enhanced protection measures for this demographic group.
Despite a four per cent decline in the number of unique customers falling victim to fraud, totaling 80,658 individuals in 2023, the severity of the issue remains unabated.
In response to these challenges, NIBSS emphasizes the importance of vigilance, enhanced security measures, and collaborative efforts within the financial industry to combat fraud effectively.
The report calls for a comprehensive review of existing regulations, urging for modifications and reinforcement to mitigate the risk of fraud and improve the chances of successful recovery.
As financial institutions grapple with the enduring threat of fraud, the call for heightened awareness, robust security protocols, and concerted action resonates louder than ever, underscoring the imperative of safeguarding the integrity of Nigeria’s financial ecosystem.