CBN Urges Financial Institutions to Curtail Fraud and Enforce 30-Minute Response Time

Banks and payment service providers have been urged by the Central Bank of Nigeria (CBN) to make quantifiable commitments to reduce electronic fraud.

Additionally, it recommended organizations to use the Nigeria Electronic Fraud Forum (NeFF) framework to address suspicious transactions within 30 minutes.

Speaking at the “Shrinking Fraud Losses with ISO 20022 and Identity Management” Technical Kick-Off Session of the 2026 Nigeria Electronic Fraud Forum (NeFF) According to Mr. Philip Ikeazor, Deputy Governor, Financial System Stability, CBN, the sector has to implement enterprise-wide, data-driven fraud management systems that can produce measurable outcomes in place of dispersed controls.

Premier Oiwoh, Managing Director and Chief Executive Officer of Nigeria Inter-Bank Settlement System Plc (NIBSS), also spoke at the conference. He stated that the financial system saw a notable improvement in fraud outcomes in 2025, with the value of money lost to fraud decreasing by 51% year over year.

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

Full utilization of ISO 20022 data, universal and real-time identity verification, improved round-the-clock fraud monitoring and response, organized frameworks for liability-sharing and consumer reimbursement, increased interaction with telecoms and payment service providers, and stringent performance evaluation through clear scorecards are some of these. Improvements are required for what is measured.

“In the end, fraud is a problem that affects financial stability rather than just operations. Unchecked fraud creates systemic dangers, jeopardizes advances in inclusivity, and erodes confidence in digital money.

Nigeria maintains macro-financial stability, promotes economic growth, and protects trust in its payments system by tightening fraud measures. The central bank is still fully dedicated to offering the coordination, policy assistance, and regulatory leadership needed to accomplish these goals.

We have an important and communal task ahead of us. 2026 can and should be remembered as the pivotal year when Nigeria significantly reduced fraud losses and ensured the future of its digital financial ecosystem thanks to well-defined goals, shared accountability, and persistent cooperation under NeFF.

As a result, the sector came to an agreement under NeFF to cut the time it takes to respond to fraud to less than 30 minutes. Ikeazor described this as a crucial step in enhancing recovery results and reducing systemic exposure.

“Efforts to mitigate fraud have changed in step with evolving threat vectors,” he said. While more recent threats, such as internet fraud, social engineering, SIM-swap misuse, insider compromise, and authorized push payment (APP) frauds, have surfaced, legacy fraud, including ATM card cloning, has been successfully eliminated.

NeFF has been instrumental in organizing prompt reactions, such as industry alerts, public awareness campaigns, obligatory two-factor authentication, round-the-clock bank fraud desks, and, most recently, the creation of a Standardized APP Scam Framework.

“A significant step that significantly improves recovery outcomes and limits systemic exposure is the industry’s agreement to cut fraud response times to less than 30 minutes.”

The impact of the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN) in lowering impersonation and synthetic identity fraud is another example of how Ikeazor emphasized the relevance of identification infrastructure in preventing fraud.

He pointed out that maintaining cooperation with the National Identity Management Commission (NIMC) would be essential to bolstering the integrity of the payment system.

According to Oiwoh’s contribution, the overall amount of fraud losses decreased from N52.26 billion in 2024 to N25.85 billion in 2025, and the number of fraud cases reported decreased by 4% to 67,518 from 70,111 in 2024.

He credited stricter regulations, increased cooperation between banks, security agencies, and regulators, and enhanced fraud detection capabilities throughout the payments ecosystem for the notable decline in fraud losses.

“Looking at industry fraud over the past five years, the number of cases has declined significantly,” he declared. Losses increased to N52.26 billion in 2024, mostly due to a single fraud occurrence involving one entity that cost N31.1 billion. 2025 saw a sharp decline in losses to N25.85 billion.

“I have to thank the police, the DSS, and other security organizations for their work. Fraud must be reduced to nearly nil if we are to attain financial inclusion. It’s doable.

According to Oiwoh, insider misuse has emerged as the single greatest concern, but social engineering continues to be the most common fraud strategy. He noted that the ongoing evolution of SIM-swap fraud, phishing, and account penetration highlights the need for more robust internal controls, employee monitoring, and collaborative industry action.

However, he warned that non-reporting is still unacceptable and voiced alarm over the dropping fraud reporting, which dropped by almost 34% in the final quarter of 2025.

Tracking and inquiry are made possible by reporting. Because events were not recorded, fraudsters occasionally just transferred from one institution to another, he claimed.

In response, Oiwoh revealed that the NIBSS has created the Person of Interest Portal in collaboration with the CBN, the Nigeria Financial Intelligence Unit (NFIU), and security agencies. As of right now, 13,417 people have been implicated in fraudulent activities since 2019. He said that law enforcement organizations were making active use of the portal.

Along with the introduction of the National Payment Stack (NPS), which was constructed in accordance with ISO 20022 and integrated with advanced security and Nigerian data sovereignty, he also emphasized the expanding significance of AI-driven cybersecurity and digital intelligence capabilities. He said that all quick payments were now risk-scored and that questionable transactions were immediately reported.

In the future, Oiwoh stated that financial knowledge and access to reasonably priced cellphones are still essential to expanding digital inclusion, while the recovery of stolen assets is still ongoing.

He emphasized that good BVN and NIN validation using APIs may prevent up to 95% of identity-related fraud, but cautioned that weak account restrictions, subpar client profile, and insufficient KYC measures continue to expose institutions to risk.

Dr. Rakiya Yusuf, CBN Director, Payment System Supervision and NeFF Chairman, stated in her presentation that the apex bank will shortly start inspecting banks to guarantee adherence to ISO 20022 standards and improved use of electronic channels.

She emphasized that all institutions must make sure that appropriate know-your-customer (KYC), know-your-business (KYB), and customer due diligence (CDD) procedures are properly followed and reaffirmed that there was no “KYC zero” policy.

“We have KYC 1, 2, and 3, with different thresholds,” the woman stated. In KYC 0, there is no identity at all.

“The central bank hasn’t developed a KYC four policy. Therefore, it will be quite expedient to address them if you have that in your books.