CBN Urges Banks to Ensure Fraud Reduction, Enforce 30-minute Response Rule

• Fraud losses decline by 51%, cases drop to 4% in 2025

•NIBSS, apex bank strengthen surveillance covering 13,417 persons of interest portal

Nume Ekeghe

The Central Bank of Nigeria (CBN) has challenged banks and payment service providers to commit to measurable reductions in electronic fraud.

It also urged institutions to respond to suspicious transactions within 30 minutes under the framework of the Nigeria Electronic Fraud Forum (NeFF).

Speaking at the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session, with the theme, ‘Shrinking Fraud Losses with ISO 20022 and Identity Management,’ the Deputy Governor, Financial System Stability, CBN, Mr. Philip Ikeazor, said the industry must move beyond fragmented controls and adopt enterprise-wide, data-driven fraud management systems capable of delivering tangible results.

Also speaking at the conference, Managing Director and Chief Executive Officer of Nigeria Inter-Bank Settlement System Plc (NIBSS), Premier Oiwoh, revealed that the financial system recorded a significant improvement in fraud outcomes in 2025, with the value of funds lost to fraud declining by 51 per cent year-on-year.

Continuing, Ikeazor said: “The industry must commit to bold, measurable fraud-reduction targets, supported by clear strategic priorities.

“These include full exploitation of ISO 20022 data, universal and real-time identity verification, enhanced 24/7 fraud monitoring and response, structured liability-sharing and consumer reimbursement frameworks, deeper engagement with payment service providers and telecoms, and rigorous performance measurement through transparent scorecards. What gets measured must be improved.

“Ultimately, fraud is not merely an operational issue; it is a financial stability concern. Unchecked fraud undermines trust in digital finance, threatens inclusion gains, and poses systemic risks.

“By strengthening fraud controls, Nigeria safeguards confidence in its payments system, supports economic growth, and reinforces macro-financial stability. The central bank remains fully committed to providing the regulatory leadership, policy support, and coordination required to achieve these objectives.

“The task before us is collective and urgent. With clear targets, shared accountability, and sustained collaboration under NeFF, 2026 can and must be remembered as the turning point when Nigeria decisively shrank fraud losses and secured the future of its digital financial ecosystem.”

In response, the industry agreed under NeFF to reduce fraud response time to under 30 minutes, a move Ikeazor described as critical to improving recovery outcomes and limiting systemic exposure.

According to him, “Fraud mitigation efforts have evolved in tandem with changing threat vectors. While legacy fraud, such as ATM card cloning, has been effectively neutralised, newer risks, online fraud, social engineering, SIM-swap abuse, insider compromise, and authorised push payment (APP) scams, have emerged.

“NeFF has played a central role in coordinating timely responses, including mandatory two-factor authentication, industry advisories, public awareness campaigns, 24/7 bank fraud desks, and, recently, the development of a Standardised APP Scam Framework.

“Importantly, the industry has agreed to reduce fraud response times to under 30 minutes, a decisive step that materially improves recovery outcomes and limits systemic exposure.”

Ikeazor also highlighted the role of identity infrastructure in constraining fraud, pointing to the impact of the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN) in reducing impersonation and synthetic identity fraud.

He noted that continued collaboration with the National Identity Management Commission (NIMC) would remain central to strengthening payment system integrity.

In his contribution, Oiwoh noted that total fraud losses fell to N25.85 billion in 2025 from N52.26 billion in 2024, while the number of reported fraud cases also declined by four per cent to 67,518 from 70,111 in the previous year.

He attributed the sharp drop in fraud losses to tighter controls, stronger collaboration among regulators, banks, and security agencies, and improved fraud detection capabilities across the payments ecosystem.

He said, “Looking at industry fraud over the past five years, the number of cases has declined significantly. In 2024, losses rose to N52.26 billion, largely driven by a single fraud incident of N31.1 billion involving one entity. In 2025, losses dropped significantly to N25.85 billion.

“I must commend the DSS, the police, and other security agencies for their efforts. If we must achieve financial inclusion, fraud must be driven as close to zero as possible. It is achievable.”

According to Oiwoh, social engineering remains the dominant fraud technique, with insider abuse emerging as the single biggest threat. SIM-swap fraud, phishing, and account compromise continue to evolve, underscoring the need for stronger internal controls, staff monitoring, and joint industry action, he added.

However, he expressed concern over declining fraud reporting, which fell by about 34 per cent in the last quarter of 2025, warning that non-reporting remains unacceptable.

“Reporting enables tracking and investigation. In some cases, fraudsters simply moved from one institution to another because incidents were not reported,” he said.

To address this, Oiwoh disclosed that the NIBSS, working with the CBN, the Nigeria Financial Intelligence Unit (NFIU), and security agencies, has built the Person of Interest Portal, which currently contains 13,417 individuals involved in fraudulent activities since 2019. The portal, he said, was actively being used by law enforcement agencies.

He also highlighted the growing role of AI-driven cybersecurity and digital intelligence tools, as well as the launch of the National Payment Stack (NPS), built in compliance with ISO 20022 and embedded with advanced security and Nigerian data sovereignty. Every instant payment, he said, was now risk-scored, with suspicious transactions flagged in real time.

Looking ahead, Oiwoh said recovery of stolen funds was ongoing, while financial literacy and access to affordable smartphones remain critical to deepening digital inclusion.

He warned that weak account limits, poor customer profiling, and inadequate KYC controls continue to expose institutions to risk, stressing that proper BVN and NIN validation through APIs can eliminate up to 95 per cent of identity-related fraud.

In her presentation, the CBN Director, Payment System Supervision and NeFF Chairman, Dr. Rakiya Yusuf, said the apex bank would soon begin inspections of banks to ensure compliance with ISO 20022 standards and enhanced electronic channel usage.

She reiterated that there was no “KYC zero” policy, emphasising that all institutions must ensure proper know-your-customer (KYC), know-your-business (KYB), and customer due diligence (CDD) procedures are strictly enforced.

She said: “We have KYC 1, 2 and 3, with different thresholds. There is no KYC called KYC zero, where there is no identity at all.

“The central bank has not come up with a policy on any category called KYC four. So if you have that in your books, it will be very expedient that you address them.”