Hackers stole N53.4bn from Nigerian banks in 9 months as fraud rises by 65%

Nigerian banks appear to be losing the battle against cyber criminals as they lost N53.4 billion in nine months to hackers. This was revealed in the latest Fraud and Forgery report by the Financial Institutions Training Centre (FITC).

According to the report which covers the first three quarters of 2024, the N53.4 billion stolen in the first nine months of this year was N44 billion more than the N9.4 billion that was stolen during the same period last year, representing a whopping 468 per cent increase over a year. 

On a quarterly basis, the report showed that cybercriminals started slowly in the first quarter of the year, stealing just N468.4 million. But the numbers will increase massively in the second quarter as the hackers stole a mind-boggling N42.8 billion representing a 9037.5 per cent increase.

The third quarter of 2024 witnessed a slowing down, with Nigerian banks losing N10.1 billion in the quarter, representing a decline of 76.4 per cent. The FITC report for Q3 is based on returns on fraud and forgery received cases from 30 deposit money institutions. 

Fraud cases against Nigerian banks rose by 65%

Along with the increasing amounts of funds stolen by hackers, the FITC report also revealed that the number of fraud cases reported by Nigerian banks rose by 65 per cent. Between July and September alone, hackers attempted to steal N115.9 billion. This is up from N56.6 billion attempted in the previous quarter, representing a 104.8 per cent increase. 

If anything, this shows that Nigerian banks got incredibly better at preventing fraud in the third quarter. Perhaps stung by losing N42.8 billion of a possible N56.6 billion (75.6 per cent) targeted in Q2, the banks bolstered their defences and did better in Q3, losing N10.1 billion of a possible N115.9 billion targeted (8.7 per cent of the amount targeted).

For the preferred mode of executing their nefarious activities, the FITC report showed that Computer/Web fraud, Mobile fraud, and POS-related fraud were most prevalent in the third quarter. This shows that much has not changed in that regard since 2023.

Bank cards appear to be the most preferred instrument for fraudsters, as card-based fraud rose from 11,237 cases in the second quarter to 17,314 cases in the third. This represents an increase of 54.2 per cent. Cash-related fraud on the other hand appears to be witnessing an uptick as cases rose from 228 in the second quarter to 517 in the third. This represents a 125 per cent quarterly increase.

On the most preferred channels for the cybercriminals, channels like ATMs, online platforms like web and mobile banking, bank branches, and POS terminals were effectively exploited by the criminals to steal from Nigerian banks.

Giving her thoughts on the increasing brazenness of cyber criminals, the Managing Director and Chief Executive Office of the FITC, Dr Chizor Malize, said there is an urgent need for Nigerian banks to tackle the rising cases of fraud as it is currently eroding the trust in the financial system.

“The increasing rate of fraud affects businesses and it is eroding the trust of the financial service sector. All the channels we use for transactions today; web, computer, mobile, and PoS, among others have become targets of fraudsters,” she said.

She disclosed that the FITC recently brought together key stakeholders to assess the risks and see how the industry could leverage Artificial Intelligence (AI) to address the problem. She maintained that emerging technologies like AI would play an important role in combating the rise of cyber threats and digital risks, which have been made worse and even more devastating by advancements in technology.

“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,” Malize concluded.

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

She further called for broad-based implementation of machine learning to address the growing financial challenges and avert potential risks while emphasising the need for collaboration among banks to tackle the menace.

“We can compete on models, we can compete on strategies, on objectives and all that. When it comes to cyber security, we are all faced with the same common enemy. So, that means we have to collaborate,” she said.

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