Investment in tech increases as Nigerian banks lose N52.26 billion to fraudsters

• In 2024, the aggregate spending of 7 large Nigerian banks connected IT upgrades came to N460 billion.
• The banks are Access Holdings, GTCO, UBA, Zenith Bank, FCMB, Stanbic, Wema and others
• Nigeria has seen a spike successful fiscal transactions, which has led to an summation successful cases of fiscal strategy fraud

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

The combined expenditure of 7 large Nigerian banks connected accusation exertion upgrades successful 2024 was N460 billion.

Financial transactions accrued successful Nigeria owed to the emergence of integer payments. Photo Credit: Contributor
Source: Getty Images

An assertive propulsion successful their integer infrastructure was evident from an introspection of the fiscal statements of Access Holdings Plc, Guaranty Trust Holding Company (GTCO) Plc, United Bank for Africa (UBA) Plc, Zenith Bank Plc, First City Monument Bank (FCMB), Stanbic, and Wema Bank.

According to Daily Trust's analysis, successful 2024, Access spent a grounds 193.5 cardinal ($120.5 million) connected physics concern and exertion infrastructure, topping the charts.

IT expenditures accrued by 48% to 88 cardinal ($56.8 million) for GTCO, doubled to 67.3 cardinal ($43 million) for Zenith, and accrued by 107% to 48 cardinal ($30.5 million) for UBA.

Stanbic, FCMB, and Wema Bank's tech pushes sucked up N33.5 billion, N26.3 billion, and N5 billion, respectively.

Some of the factors that contributed to the spike successful tech spending were speech complaint volatility-induced inflation, important changes to Flexcube, the company's superior banking software, cybersecurity improvements, and enlargement into Tanzania, Namibia, and Hong Kong.

Following the immense investment, Access Holdings recorded driblet successful its fraud-related losses dropped sharply by 73%.

Access outperforms its rivals acknowledgment to its assertive tech push. IT expenditures accrued by 48% to 88 cardinal ($56.8 million) for GTCO, doubled to 67.3 cardinal ($43 million) for Zenith, and accrued by 107% to 48 cardinal ($30.5 million) for UBA.

The sector's fraud losses, however, demonstrated the effect of these investments. From 198.8 cardinal ($123,881) to 159.1 cardinal ($99,421), GTCO's fraud losses decreased little. However, Zenith saw a jump, going from 383.4 cardinal ($238,914) to 5.26 cardinal ($3.3 million), highlighting the pressing request for improved fraud prevention equipment.

Why fraud continues to rise

Financial transactions person accrued successful Nigeria owed to the emergence of digital payments, and this has coincided with an summation successful fiscal strategy fraud instances.

According to a study published by Cybervergent, a starring exertion institution offering automated cybersecurity solutions, astatine slightest 586,130 cyberattacks from antithetic menace actors rocked Nigeria's fiscal institutions and different industries successful the archetypal fractional of 2024.

Cybervergent automated the solution of 226,103 of the 586,130 cyberthreats it identified; it besides safeguarded 19,920 endpoints and examined 304,522 events done its Security Operations Centre (SOC).

Fraud-related losses successful Nigeria accrued from 1.18 cardinal crossed 12,066 instances successful the 3rd 4th of 2023 to 10.1 cardinal crossed 19,007 cases successful the 3rd 4th of 2024, according to probe by the Financial Institutions Training Centre (FITC).

Fraud-related losses successful Nigeria accrued from 1.18 cardinal Q3 2023 to 10.1 cardinal successful Q3 2024. Photo Credit: Contributor
Source: Getty Images

Nonetheless, the wide sum decreased from 42.8 cardinal connected a quarter-over-quarter basis, indicating immoderate caller improvements.

Nigerian fiscal institutions mislaid N52.26 cardinal to fraud successful 2024, according to the astir caller study from the Nigeria Inter-Bank Settlement System (NIBSS).

When compared to N17.67 cardinal successful 2023, this indicates a sizeable emergence of N34.59 billion.

The magnitude mislaid to fraud has risen by 196% implicit the past 5 years, successful enactment with the enlargement of fiscal transactions successful the integer payments industry, according to the NIBSS Fraud Report, which tracks fraud activities, whether palmy oregon not, and associated metrics recovered by determination fiscal institutions oregon agencies.

EFCC takes enactment arsenic fraudsters bargain N52.26 cardinal

Legit.ng reported that contempt continuous efforts to amended information systems, Nigerian banks reported a startling N52.26 cardinal nonaccomplishment to fraud successful 2024, a concern that highlights the expanding sophistication of fiscal crimes.

According to the astir caller study from the Nigeria Inter-Bank Settlement System (NIBSS), the banking manufacture is inactive earnestly threatened by fraudulent activities specified arsenic insider collusion, relationship manipulation, and individuality theft.

However, NIBSS and the Economic and Financial Crimes Commission (EFCC) were capable to efficaciously retrieve N1.74 cardinal to halt these amerciable actions and reclaim stolen cash.

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Source: Legit.ng