What account security mean for Nigerian customers

As Nigeria’s digital payments ecosystem expands rapidly, customers are increasingly judging banks not just by convenience or speed, but by how safe their services feel making security a key driver of trust, loyalty, and platform choice.

According to KPMG’s 2025 Nigeria Customer Experience Survey, fraud has become less frequent but significantly more damaging; Nigerian customers are redefining what “account security” truly means in the age of mobile banking.

“Security has moved from a backend compliance requirement to a frontline customer experience issue,” the KPMG report said, adding that customers now expect protection mechanisms that reflect real-life fraud scenarios rather than theoretical system designs.

What “safety” means to customers

KPMG’s survey identifies three dimensions that matter most to Nigerian customers when it comes to account security: protection from fraud and scams, privacy of personal and financial data, and strong authentication measures such as PINs, one-time passwords, and biometrics.

Crucially, customers are increasingly dissatisfied with reactive approaches that focus on dispute resolution after losses occur. Instead, they want banks to embed preventative, experience-led safeguards directly into everyday banking journeys.

“Customers are signalling that safety is no longer about what happens after fraud occurs, but about whether the bank anticipated the risk in the first place,” the report said.

One example highlighted in the survey is Sterling Bank’s recent upgrade to its OneBank app, which introduced a panic password feature. The functionality allows customers under duress to log into a restricted version of their account that displays limited balances and constrains transaction capabilities.

According to KPMG, the design reflects a growing understanding that fraud is not always technical in nature.

“This approach acknowledges that fraud can involve coercion, not just system compromise, and helps limit losses even when customers are forced to cooperate,” the report said.

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Behind the customer-facing experience, Nigeria’s payments infrastructure is undergoing rapid transformation. Building on the success of the NIBSS Instant Payment (NIP) platform, the Nigeria Inter-Bank Settlement System (NIBSS) has developed the National Payment Stack (NPS), a next-generation infrastructure aimed at improving interoperability, transaction speed, and system resilience.

There are also plans to eliminate instant transfer fees by 2026 through a subscription-based model.

For customers, these upgrades promise faster transactions, greater reliability during peak periods, and more predictable costs. However, KPMG warns that infrastructure alone does not guarantee better experiences.

“The value of these investments is realised only when customers feel confident using digital channels repeatedly and at scale,” the report said.

Nigeria’s transition from a cash-based economy to a digital payments ecosystem has accelerated sharply. In 2024, electronic payment transactions reached N1.07 quadrillion, representing nearly 80 percent year-on-year growth. By the first quarter of 2025, transaction values had already climbed to N285 trillion, underscoring how deeply digital payments are now embedded in daily life.

Yet confidence has not kept pace. Only 33 percent of customers say they feel very secure about how their digital transactions are handled, while 53 percent say they do not fully trust their bank’s digital platforms.

“As digital becomes the default rather than the alternative, trust, not functionality, has emerged as one of the biggest customer experience challenges for banks,” KPMG said.

Fewer fraud cases, bigger losses

Customer anxiety is reinforced by the evolving nature of fraud in Nigeria’s financial system. Financial institutions reportedly lost N52.26 billion to fraud in 2024, up sharply from N17.67 billion in 2023.

While the number of reported fraud cases fell by 33.8 percent to 12,347 in the first quarter of 2025, the value of fraud rose to N22.27 billion, with actual losses increasing by 137.2 percent quarter-on-quarter.

Similarly, banking sector fraud in Nigeria recorded a significant decline in 2025, according to industry data presented at the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session in Lagos.

Figures from the Nigeria Inter-Bank Settlement System (NIBSS) show that total losses from fraud dropped by 51% to ₦25.85 billion in 2025, down from ₦52.26 billion in 2024.

“The data shows a clear shift: fraud incidents are becoming fewer but far more sophisticated and costly,” KPMG said.

For customers, this has turned fraud from an abstract risk into a personal threat that directly shapes behaviour and platform choice.

With safety concerns rising, mobile banking apps have become the primary interface through which customers judge their bank’s security posture. App availability, transparency and responsiveness now play a critical role in shaping trust.

Among leading providers, fintechs continue to set the benchmark. The survey points to Opay as a standout, citing its high application uptime, real-time network status updates, instant transaction tracking and visible security cues.

However, KPMG noted that the performance gap between top fintechs and leading traditional banks has narrowed significantly, particularly among the top three players in each category.

“As reliability becomes a baseline expectation, customers are raising the bar on what they expect next  proactive protection, intuitive controls, and visible accountability,” the report said.

The survey noted that in Nigeria’s fast-evolving digital economy, account security is no longer just about preventing breaches.

“Customers are judging banks by how protected they feel before, during, and after every interaction,” KPMG said, warning that institutions that fail to treat security as a core experience risk losing relevance.

Chinwe Michael is a financial inclusion advocate and economy journalist who uses compelling storytelling to drive awareness. With a background in Banking and Finance and experience across accounting, media, and education, she applies sharp analysis and attention to detail to every piece. She simplifies complex financial and economy concepts into engaging content for Africa and global audience. Chinwe also doubles as a speaker with global recognition for her expertise.

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