NIBSS Reveals Most Prominent Fraud Technique in Nigerian Banks
The Nigeria Inter-Bank Settlement System (NIBSS) has identified social engineering as the most prominent fraud technique targeting Nigerian banks and the wider digital payments ecosystem, raising fresh concerns about evolving risks in the country’s financial sector.
At the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session held in Lagos, Premier Oiwoh, Managing Director and Chief Executive Officer of NIBSS, outlined the latest fraud trends and data for the banking industry. While the overall value of losses to fraud fell sharply in 2025, social engineering remains the leading method used by fraudsters to deceive customers and breach security controls.
Social Engineering Tops Fraud Methods
Social engineering — a technique that manipulates people into divulging confidential information or performing actions that compromise their accounts — was highlighted as the dominant fraud threat. Within this category, insider-assisted fraud was singled out as especially concerning, with perpetrators exploiting trusted positions or behavioural vulnerabilities to facilitate scams.
Other scam techniques, such as SIM-swap fraud, account compromise, and phishing, continue to grow in sophistication and frequency, underscoring that fraudsters are adapting as digital banking usage expands.
Improvements in Fraud Outcomes
Despite the prominence of social engineering, NIBSS reported a 51 per cent decline in the total value lost to digital payment fraud in 2025 — dropping to N25.85 billion compared with N52.26 billion the previous year — thanks to enhanced collaboration among banks, regulators and security agencies.
The number of reported cases of fraud also declined modestly, reflecting ongoing efforts to tighten controls and improve detection systems across the industry.
Call for Stronger Controls and Reporting
While celebrating progress, Oiwoh expressed concern about declining fraud reporting compliance, noting that under-reporting could allow fraudsters to exploit gaps and move between institutions undetected.
He urged banks to embrace stronger internal controls, intensify customer education, and improve identity verification processes — including full validation of Bank Verification Numbers (BVN) and National Identification Numbers (NIN) — to counter deceptive tactics effectively.
Industry Outlook
The NIBSS chief said combating fraud requires industry-wide collaboration, data-driven fraud management systems, and real-time monitoring tools, including artificial intelligence-driven detection technologies. He emphasised that sustained vigilance and tighter security measures are essential to protecting customers and safeguarding trust in Nigeria’s digital financial ecosystem.
As digital banking and mobile transactions continue to grow, industry stakeholders stress that both financial institutions and customers must stay alert to social engineering and other deceptive tactics that can undermine confidence and lead to significant losses.