*Customers Wary Of Rising Frauds, Insider Abuses
Nigerian banks lost about N52.26 billion to fraud in 2024, based on data released by the Nigeria Inter-Bank Settlement System (NIBSS).
Metrobusinessnews.com further investigations show that billions of cash is either being illegally transfered or carried through the nation’s ports, and the practices are increasing despite the cashless policy by the Central Bank of Nigeria (CBN).
Also, recent interventions by the Economic and Financial Crimes Commission, (EFCC) in saving billions of naira that hackers would have frittered away from six major Nigerian banks, to the current alert by the Nigerian Financial Intelligence Unit (NFIU) to financial institutions on the surge in suspicious financial transactions from the country to — two emerging hotspots for illicit financial flows – Hong Kong and Dubai, among others are causing disquiet in the industry.
EFCC said recently that it is working on helping six Nigerian banks recover billions of Naira stolen by hackers, who gained access to the banks’ systems, with internal collaborators.
Chairman of the Commission, Ola Olukoyede, during an interview on TVC on a Sunday, indicated that major banks were involved.
“As I’m talking to you, we have about six banks—I will not mention names because of their image—that have been hacked into by young people,” Olukoyede disclosed.
According to the EFCC boss, the Commission has been able to recover over N9 billion for one of the banks. “This is a major bank,” he added.
“For another one, we’ve been able to save about N6 billion,” he said.
He noted that the fraud could not have happened without the involvement of the banks’ staff, who connived with the hackers.
According to him, the hackers used devices, which they plugged into the bank’s systems, to perpetrate the heinous act.
“They actually do it with the insiders, the bank staff. They will plug the device into their platform, wherever the other person is, even if he’s outside Nigeria, he will be able to control the platform of the bank.
“So, from there, wherever, whether it’s in Eastern Europe or America, he can move money. He can move billions in seconds just the way your bank account officer can move your money in and out of your account,” the EFCC Chairman said.
He added that while the hackers may not be able to move the money out completely, they can distribute it to accounts of many customers.
He said they also move money to wallets or to POS, and from there, they withdraw the money and disappear.
“So many banks are vulnerable as I’m talking to you now. But that may not have been possible without the connivance of the bank staff,” he emphasized.
As if this is not enough signal that the industry is vulnerable, NFIU has alerted financial institutions to the rising suspicious surge in financial transactions from Nigeria to — two emerging hotspots for illicit financial flows.
The NFIU, in a May 2025 report, spotted an increasing number of Suspicious Transaction Reports (STRs) filed on transactions to these regions-Hong Kong and Dubai.
“It is pertinent to note that in 2021 only 2 STRs valued at just ₦42 million were reported. However, by 2024 the value increased to 202 STRs valued at ₦32 billion.
“Between January 2021 and September 2024, the NFIU received a total of 401 suspicious transaction reports (STRs) from reporting entities valued at over ₦48 billion. 185 of these were linked to Dubai and 216 were linked to the Hong Kong axis,” the report partly read.
The NFIU therefore urged financial institutions, designated non-financial businesses and professions and their regulators to apply enhanced due diligence, robust transaction monitoring, and comprehensive reporting measures to transactions linked to Dubai and Hong Kong to detect, prevent, and report suspicious financial transactions to mitigate the impacts of this emerging threat/vulnerability.
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The report further said, “This ‘Dubai-Kong axis’, as coined by Sussex researchers, has become a primary channel for IFFs (illicit financial flows) due to its strategic positioning across Asia, the Middle East, and links to former colonial networks that allow connectivity to Western financial markets.
“This axis is increasingly viewed as an attractive route for “dirty money”
networks and is noted for its capacity to accommodate a range of illicit financial
activities due to differing regulatory standards and legal infrastructures.
“In view of the above, the NFIU finds it pertinent to issue this advisory to the relevant stakeholders to employ Enhanced Due Diligence (EDD) in the detection, deterrence and prevention of abuse of the financial system through these hotspots.”
However, bank customers are becoming apprehensive concerning the increasing sharp practices within the industry.
They argue that the scenario is becoming a kind of ‘game of chess’ between the banks and their workers on one hand and the banks and corrupt highnetworth individuals and corporate organisations on the other hand.
Some analysts say, while the banks are struggling to meet up regulatory financial requirements and beat stiff competition, hence the abuse of corporate governance, the workers, on the other hand are taking advantage of the ‘new normal’ in the industry, to perpetuate their ‘business’.
But, Olukoyede said the anti-graft agency is paying attention to the fraud in banks because of its impact on the economy.
According to him, the agency has been doing a lot in that area and not talking about it in order not to get Nigerians panicky, which may lead to mass withdrawal from the affected banks.
“It’s not the fault of the bank, but it’s the fault of the staff of the bank, some of the staff. And that’s why we have told the bank executives, look inwards.
“There is no way this act could be carried out successfully without the connivance of your staff. In all the cases we have seen, we’ve always seen the hand of bank staff,” he said.
For instance, NIBSS data showed a significant increase of N34.59 billion compared to the N17.67 billion recorded in 2023.
According to the latest report, the amount lost to fraud has increased by 196% over the past five years, in parallel with the growth of financial transactions in the digital payments sector.
Although the annual fraud count reported decreased by 31%, from 101,624 in 2020 to 70,111 in 2024, the amount lost to fraud grew by 350%, rising from N11.61 billion to N52.26 billion within the same period.
With the deadline to the new minimum capital requirements fast approaching, analysts say, the regulators and anti graft agencies must be alive to their responsibilities.
