FITC Report Reveals Surge in Digital Fraud Incidents in Nigeria’s Financial Services Sector

Oluchi Chibuzor

A report by the Financial Institutions Training Centre (FITC), has revealed a staggering 50% increase in fraud-related financial losses and a 100% surge in digital fraud incidents in the Nigerian financial services sector, between Q1 and Q3 of 2024, calling for immediate and decisive action within the sector.

According to the report, fraud cases have escalated across all platforms, with the rise of digital transactions further amplifying the risks.

The report said financial institutions in Nigeria have suffered a significant hit due to the growing sophistication of cyber fraud, identity theft, and insider collusion.

The report was unveiled at the FITC Risk Round Table themed, “Financial System Stability, Leveraging AI for Financial Fraud Detection and Regulations.”

In her opening remarks, MD/CEO of FITC, Dr. Chizor Malize, emphasised the role of emerging technologies like artificial intelligence (AI) in combating the rise of cyber threats and digital risks, which have been exacerbated by advancements in technology.

Malize highlighted FITC’s proactive approach in providing industry insights and fostering collaboration among stakeholders to address these challenges.

“As the Fraud Risk Report underscores, there is an urgent need for leveraging AI to mitigate risks and bolster the stability of the financial system,” she said. “FITC has been pivotal in bringing together industry leaders, regulators, and operators to develop AI- driven cybersecurity frameworks and predictive tools. By integrating AI into our training programs and risk simulations, we empower organizations to anticipate, mitigate, and manage risks effectively.”

MD/CEO of NDIC, Mr. Bello Hassan represented by Director Enterprise Risk Management at NDIC, Amal Haruna, acknowledged the growing challenge of financial fraud in various forms, including payment fraud, insider fraud, account takeovers, identity theft, money laundering, and fraudulent transactions.

MD/CEO of Pattison Consulting Limited, Mr. Pattison Boleigha, advocated for the wider

adoption of AI tools and software to counter financial fraud.

He urged regulators to be trained on these technologies while calling for increased consumer awareness and collaboration between consumers, operators, and regulators to combat fraud effectively.

Group Chief Information Security Officer of Access Bank, Mrs. Favour Femi-Oyewole, also highlighted the need for embedded security in the financial sector due to consumers’ exposure to diverse APIs and multiple digital footprints.

AI expert and Founder and CEO of Shreem Growth Partners, Ms. Aarti Samani, issued a stark warning about the increasing use of identity verification manipulation and deepfake technology by fraudsters.