Nigeria’s digital payment fraud losses dropped significantly in 2025, falling from ₦52.26 billion recorded in 2024 to ₦25.85 billion, according to a new industry report. While the decline appears encouraging, experts warn that financial criminals are becoming more sophisticated as artificial intelligence (AI) reshapes the fraud landscape.
The findings were revealed in “The Compliance Reckoning,” a report published by compliance platform Adhere in partnership with TechCabal. The report was unveiled at the Trust Frontier Forum in Lagos, where regulators, banks, fintech leaders, and law enforcement agencies discussed the future of financial crime prevention in Nigeria.
Fraud Losses Decline, But the Threat Is Evolving
Although reported losses have dropped by more than 50% year-over-year, the report cautions against interpreting the figures as evidence that financial crime is declining.
Instead, fraud schemes are becoming more targeted, sophisticated, and expensive when they succeed. Since 2020, reported fraud losses have risen by approximately 350%, even as the number of reported fraud cases has decreased.
This trend suggests that attackers are focusing on fewer but more damaging attacks, increasing the financial impact on victims and institutions.
AI Is Making Digital Payment Fraud More Dangerous
One of the report’s biggest concerns is the growing use of artificial intelligence by cybercriminals.
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According to the report, global financial fraud losses are projected to reach $442 billion in 2025, with AI-powered fraud expected to generate returns about 4.5 times higher than traditional fraud methods.
Criminals are increasingly using AI to:
- Create realistic fake identities
- Clone voices for impersonation scams
- Automate phishing and cyberattacks
- Personalize fraud attempts to improve success rates
As these tactics become more advanced, traditional fraud detection systems alone may no longer be enough to protect financial institutions and customers.
CBN Tightens Compliance Requirements
The report also highlights Nigeria’s increasingly strict regulatory environment.
Over the past 14 months, the Central Bank of Nigeria (CBN) introduced 17 regulatory actions focused on cybersecurity, anti-money laundering, and data protection. Many of these requirements carry compliance deadlines extending from 2026 to 2028.
According to the report, compliance is no longer just about avoiding regulatory penalties. Weak compliance frameworks can expose banks and fintech companies to operational disruptions, reputational damage, and challenges in maintaining international banking relationships.
Stronger Defenses Needed Against AI-Driven Fraud
The report concludes that AI should be viewed as part of the solution, not the entire solution.
Financial institutions are encouraged to combine AI-powered fraud detection with stronger governance, continuous transaction monitoring, improved customer risk profiling, and closer collaboration across the financial sector.
It also warns that Nigeria’s shortage of cybersecurity professionals, combined with the country’s rapidly expanding digital payments ecosystem, could leave banks and fintech companies more vulnerable if detection capabilities do not improve.
As AI continues to transform financial crime, organizations that strengthen both their technology and compliance systems will be better positioned to combat the next generation of digital payment fraud.
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