Social Engineering Tops Methods in Nigerian Banking Fraud, Causes N9.4 Billion Loss in 2023


Over the past five years, Nigeria’s banking sector has witnessed a concerning rise in fraud cases, resulting in significant financial losses, according to a recent report by SBM Intelligence.

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The Africa-focused research firm revealed that from 2019 to 2023, losses due to fraudulent activities surged by N14.71 billion. The report, published in June, outlines a steady increase in annual losses attributed to fraud within the sector.

“While the number of fraud incidents has slightly decreased since its peak in 2021, the monetary losses have escalated considerably,” SBM Intelligence stated. “This trend suggests that perpetrators have refined their methods, enabling them to siphon larger sums undetected.”

In 2019, the banking sector reported 44,947 fraud cases, resulting in losses amounting to N2.96 billion. By 2020, incidents more than doubled to 101,624 cases, with losses soaring to N11.61 billion. The trend continued in 2021, with 123,918 cases and losses totaling N12.77 billion.

Despite a reduction in the number of reported incidents to 101,669 in 2022, financial losses surged to N14.32 billion. In 2023, although incidents decreased further to 95,620 cases, losses reached an unprecedented N17.67 billion.

The report highlights various methods used by fraudsters, including social engineering, website/server hacking, robbery, PIN compromise, internal collusion, phone theft, and SMiShing (SMS phishing).

Losses due to social engineering alone rose from N8 billion in 2022 to N9.4 billion in 2023. Website/server hacking saw losses jump from N6.2 million to N2.4 billion over the same period. Robbery-related fraud losses escalated from N437.4 million in 2022 to N1.6 billion in 2023, while PIN compromise resulted in losses of N852.3 million in 2022 and N1.3 billion in 2023.

Internal collusion accounted for losses of N1.5 billion in 2022 and N1.04 billion in 2023, while losses from phone theft rose from N259.2 million to N317.7 million. SMiShing losses surged from N1.01 million to N30.7 million during the same period.

Additional channels such as fake assistance, missing/lost cards, phishing, lack of two-factor authentication (2FA), and card theft also significantly contributed to the overall losses reported in 2023.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247news
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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