The Central Bank of Nigeria (CBN) is calling on banks and payment service providers to take definite measures to reduce electronic fraud incidents. Additionally, they are required to respond to suspicious transactions within a time frame of 30 minutes, adhering to the guidelines set forth by the Nigeria Electronic Fraud Forum (NeFF).
During the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session, themed 'Shrinking Fraud Losses with ISO 20022 and Identity Management,' Mr. Philip Ikeazor, Deputy Governor of the CBN for Financial System Stability, emphasized the need for the banking sector to transition from isolated control measures to comprehensive, data-driven fraud management strategies that yield real results.
At the event, Premier Oiwoh, the Managing Director and Chief Executive Officer of Nigeria Inter-Bank Settlement System Plc (NIBSS), shared insights into the financial sector's significant strides in combating fraud throughout 2025, noting a remarkable 51% year-on-year drop in the amount of funds lost to fraudulent activities.
Ikeazor pointed out the necessity for the industry to set ambitious, quantifiable fraud-reduction goals, grounded in established strategic priorities. He outlined a series of steps to enhance fraud control, which include:
\- Leveraging the full potential of ISO 20022 data.
\- Implementing universal and instantaneous identity verification.
\- Enhancing fraud monitoring and response capabilities around the clock.
\- Establishing structured frameworks for liability-sharing and consumer reimbursement.
\- Engaging more deeply with payment service providers and telecom companies.
\- Utilizing transparent scorecards for performance measurement, emphasizing that improvement follows measurement.
He highlighted the importance of addressing fraud as not only an operational issue but also a challenge to financial stability, as unchecked fraud diminishes trust in digital finance, jeopardizes progress in financial inclusion, and creates systemic risks.
The industry has reached a consensus under NeFF to cut down the fraud response time to below 30 minutes, a critical move that Ikeazor believes will enhance recovery rates and reduce systemic vulnerabilities.
Ikeazor elaborated, stating, "Fraud mitigation strategies have developed in sync with the evolving threat landscape. Legacy fraud tactics, such as ATM card cloning, have largely been contained, but newer threats, including online fraud, social engineering, SIM-swap scams, insider threats, and authorized push payment (APP) fraud, are on the rise."
"NeFF has been instrumental in fostering timely responses, incorporating mandatory two-factor authentication, disseminating industry advisories, launching public awareness initiatives, maintaining 24/7 bank fraud help desks, and most recently, creating a Standardized APP Scam Framework."
He underscored that focusing on identity infrastructure is crucial in combating fraud and cited the effectiveness of the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN) in mitigating impersonation and synthetic identity fraud.
Oiwoh further reported that total fraud losses dropped to N25.85 billion in 2025, down from N52.26 billion in 2024, accompanied by a four percent reduction in reported fraud cases, which fell to 67,518 from 70,111 the previous year. He credited this decline to stricter controls, enhanced collaboration among regulators, financial institutions, and security agencies, and improved fraud detection methods throughout the payment systems.
He remarked, "Examining industry fraud trends over the last five years, we see a significant drop in cases. In 2024, losses amounted to N52.26 billion, mainly due to a single fraud incident valued at N31.1 billion. In 2025, losses have decreased to N25.85 billion."
Oiwoh commended the efforts of the Department of State Services (DSS), law enforcement, and other security bodies, emphasizing that for financial inclusion to succeed, fraud must be reduced to minimal levels, which he believes is attainable.
He pointed out that social engineering is currently the most prevalent fraud technique, with insider fraud emerging as the principal threat. SIM-swap fraud, phishing, and account takeovers are consistently developing, highlighting the essential need for stronger internal controls, employee supervision, and collaborative efforts within the industry.
However, he expressed concern over a significant decline in fraud reporting, which saw a 34 percent reduction in the last quarter of 2025. He warned that this reluctance to report is unacceptable as it inhibits tracking and investigation efforts. "In some instances, fraudsters merely shift from one institution to another, escaping accountability due to unreported incidents," he explained.
To combat this, Oiwoh announced that NIBSS is collaborating with CBN, the Nigeria Financial Intelligence Unit (NFIU), and security agencies to create a Person of Interest Portal, which presently includes 13,417 individuals linked to fraudulent activities since 2019. This portal is actively utilized by law enforcement agencies.
Oiwoh also discussed the increasing significance of AI-enabled cybersecurity and digital intelligence tools, alongside the introduction of the National Payment Stack (NPS), which is developed in line with ISO 20022 requirements, incorporating advanced security measures and ensuring compliance with Nigerian data sovereignty. As a result, every instant payment is now assessed for risk, with suspicious activities flagged instantly.
Looking to the future, Oiwoh noted that the recovery of misappropriated funds is ongoing, while promoting financial literacy and providing access to affordable smartphones remains essential for enhancing digital inclusion.
He cautioned that inadequate account limits, poor customer profiling, and insufficient know your customer (KYC) procedures continue to expose institutions to risks, stressing that appropriate BVN and NIN validation through APIs can mitigate up to 95% of identity-related fraud.
Dr. Rakiya Yusuf, the CBN Director of Payment System Supervision and Chairman of NeFF, mentioned that the central bank will soon initiate audits of banks to ensure adherence to ISO 20022 standards and optimized use of electronic channels.
She clarified that there is no “KYC zero” policy, emphasizing that all institutions are required to maintain proper KYC, know-your-business (KYB), and customer due diligence (CDD) processes stringently.
Dr. Yusuf stated, "We categorize KYC into levels 1, 2, and 3, each with distinct thresholds. There is no category referred to as KYC zero, which entails having no identity verification at all."
In conclusion, it is vital for institutions to address any misleading information regarding KYC classifications.
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