Nigeria’s expanding digital payments ecosystem has created new opportunities for financial inclusion and innovation, but it is also making the country’s financial system a more attractive target for sophisticated cybercriminals, according to industry leaders.
While speaking at the CWG Plc and Clari5 Anti-Financial Crime Summit themed ‘Strengthening Nigeria’s Anti-Fraud and AML Defence in the AI Era,’ experts said banks and regulators must rely on artificial intelligence (AI) to combat AI-enabled fraud, money laundering and financial crime.
The warning comes as Nigeria’s digital payments industry continues its rapid growth.
According to the Nigeria Inter-Bank Settlement System (NIBSS), electronic payment transactions reached over N1.07 quadrillion in 2024, a 79.6 percent increase from about N600 trillion in 2023, which reflects the country’s increasing shift toward digital financial services.
Meanwhile, the Central Bank of Nigeria (CBN) reports that the country has more than 230 million registered bank accounts, while fintech adoption continues to expand across retail and business payments.
Growth attracting more financial criminals
Speaking with BusinessDay on the sidelines of the summit, Adewale Adeyipo, Group Chief Executive Officer of CWG Plc, said the rapid expansion of digital payment channels has naturally widened the attack surface for fraudsters.
“With the level of growth, especially as we begin to see the emergence of new payment rails within Nigeria’s financial ecosystem, it will naturally draw the attention of fraudsters within the ecosystem,” he said.
“As the ecosystem expands, you also see the influx of non-state actors trying to exploit vulnerabilities. There has been a major spike in those activities,” Adeyipo added.
Nigeria’s financial sector has experienced a sharp rise in fraud attempts alongside increasing digital adoption.
According to the Nigeria Inter-Bank Settlement System (NIBSS) Fraud Report, financial institutions recorded millions of fraud attempts in recent years, with digital channels accounting for an increasing share of attacks.
AI becomes both the weapon and the defence
Industry executives noted that artificial intelligence is changing how financial crime is committed and detected.
According to Adeyipo, AI itself is neutral, but its impact depends on who controls it.
“If the good guys hold the same AI, they will do phenomenal things with it and if it falls into the hands of bad actors, then a lot of harm can also be done.
“He said regulators, banks and financial institutions must continue upgrading their fraud prevention systems to match the speed at which criminals are adopting AI.
“Banking is all about trust. Institutions must optimise their systems to prevent attacks or at least protect the assets entrusted to them.”
Despite concerns over AI-driven fraud, Adeyipo commended Nigerian regulators for their efforts.
“If you look at the volume of fraud attempts banks handle every day and the sophistication of today’s attacks, you’ll appreciate that regulators are doing quite a lot,” he said.
“From the outside, it may appear that more needs to be done, and I agree there are still gaps but considering what they are dealing with daily, they are giving it their best while continuing to improve.”
Banks must abandon siloed fraud systems
Dhruv Manga, Chief Revenue Officer at Clari5 – a Perfios company, said traditional fraud monitoring approaches are no longer sufficient because cybercriminals are already using AI to execute sophisticated scams.
He noted that banks previously relied on reactive fraud management systems where different channels operated independently, making it easier for criminals to exploit gaps.
“What we are seeing is that banks now need a unified fraud management platform,” Manga said. “If banks continue using siloed systems that are not AI-enabled or capable of real-time fraud prevention, fraudsters will continue becoming smarter.”
According to him, financial institutions that fail to adopt AI risk falling behind.
“Fraudsters are already leveraging AI to attack banks and customers. If banks do not leverage AI themselves, they are definitely going to be the losers.”
Manga said one of the fastest-growing threats is AI-enabled impersonation fraud, where criminals use artificial intelligence to convincingly mimic legitimate customers or trusted individuals.
“They can emulate, making transactions appear legitimate when they are actually initiated by scammers using AI.”
He added that AI adoption is no longer optional for financial institutions. “In today’s world, where everyone uses AI tools daily, banks also need an AI-led strategy if they want to stay ahead.”
Collaboration remains the strongest defence
Ngover Ihyembe-Nwankwo, Executive Director at NIBSS, said combating financial crime requires more than deploying technology.
“The future of internal audit is not simply to confirm that yesterday’s controls worked,” she said. “It is about preparing organisations for tomorrow’s risks.”
She argued that technology, AI and better regulation alone would not solve financial crime, but stronger collaboration between financial institutions, regulators and technology providers remains the most effective defence.
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