FITC Report: Fraud-related Losses In Nigeria Rise By 50%

Nigeria’s leading financial industry training and consulting firm, The Financial Institutions Training Centre (FITC), has released its latest Fraud Risk Report, revealing alarming trends in financial crimes across the nation.

According to FITC, the report highlights a staggering 50 per cent increase in fraud-related financial losses and a 100 per cent surge in digital fraud incidents between Q1 and Q3 of 2024, calling for immediate and decisive action within the sector.

According to the report, fraud cases have escalated across all platforms, with the rise of digital transactions further amplifying the risks. Financial institutions in Nigeria have suffered a significant hit due to the growing sophistication of cyber fraud, identity theft, and insider collusion.

At a Risk Round Table themed “Financial System Stability, Leveraging AI for Financial Fraud Detection and Regulations” convened by FITC recently, experts spoke on the escalating threat of financial crimes and the urgent need for innovative solutions.

In her opening remarks, Dr. Chizor Malize, MD/CEO of FITC, emphasised the role of emerging technologies like artificial intelligence (AI) in combating the rise of cyber threats and digital risks, which have been exacerbated by advancements in technology.

Malize highlighted FITC’s proactive approach in providing industry insights and fostering collaboration among stakeholders to address these challenges. “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,” she said. “FITC has been pivotal in bringing together industry leaders, regulators, and operators to develop AIdriven cybersecurity frameworks and predictive tools. By integrating AI into our training programs and risk simulations, we empower organizations to anticipate, mitigate, and manage risks effectively. These efforts not only restore consumer confidence but also promote financial inclusion, aligning with the Central Bank of Nigeria’s objectives to strengthen the financial ecosystem.

” Dr. Malize also stressed the importance of recapitalisation in addressing fraud and digital risks to ensure the stability and growth of Nigeria’s banking sector. “Through data-driven insights, collaborative platforms, and strategic engagements, FITC supports the industry in tackling emerging risks and seizing new opportunities. Whether it’s fraud prevention, advancing AI adoption, or navigating recapitalization, FITC remains committed to fostering innovation and building resilience in the financial ecosystem.” In conclusion she referenced the federal government’s recapitalisation directives, noting that while they present challenges, they also offer significant opportunities for transformation, drawing on the success of previous consolidation exercises in 2005/2006.

MD/CEO of NDIC, Bello Hassan represented by Amal Haruna, Director Enterprise Risk Management at NDIC, acknowledged the growing challenge of financial fraud in various forms, including payment fraud, insider fraud, account takeovers, identity theft, money laundering, and fraudulent transactions.

However, its implementation must be approached with caution, collaboration, and a commitment to ethical principles.”

MD/CEO of Pattison Consulting Limited, Pattison Boleigha, advocated for the wider adoption of AI tools and software to counter financial fraud. He urged regulators to be trained on these technologies while calling for increased consumer awareness and collaboration between consumers, operators, and regulators to combat fraud effectively.

Group chief information Security Officer of Access Bank, Favour Femi-Oyewole, also highlighted the need for embedded security in the financial sector due to consumers’ exposure to diverse APIs and multiple digital footprints.

She called for broad-based implementation of machine learning to address the growing financial challenges and avert potential risks.

AI expert  Founder and CEO of Shreem Growth Partners, Aarti Samani, issued a stark warning about the increasing use of identity verification manipulation and deepfake technology by fraudsters.