Nigeria’s reported digital payment fraud losses declined by more than 50 per cent to N25.85 billion in 2025 from N52.26 billion in 2024, but fraud attacks are becoming more targeted, sophisticated and costly.

This is according to a new industry report unveiled by compliance technology firm Adhere on Friday, July 24, 2026.

The report, The Compliance Reckoning: Regulating Financial Services in the Age of AI, released in partnership with TechCabal at the Adhere Compliance Frontline Forum 2026 in Lagos, revealed that the decline in reported losses masks a more concerning trend, with fraud losses rising by about 350 per cent since 2020 even as the number of reported cases fell by approximately 31 per cent.

According to the report, cybercriminals are increasingly relying on artificial intelligence and sophisticated attack methods, making individual fraud incidents significantly more expensive for financial institutions.

“The institutions that come through the next eighteen months intact will not be the ones with the best AI tools, but the ones with the architecture around them, built on proactive detection, full customer risk context, model governance and collaboration across institutions,” the report stated.

The report estimates that financial fraud losses worldwide reached $442 billion in 2025, with AI-enhanced fraud now about 4.5 times more profitable than traditional fraud methods.

Despite processing more than 10 billion real-time financial transactions annually, Nigeria ranks 110th out of 112 countries for fraud protection and faces a cybersecurity workforce gap of about 90 per cent, highlighting the scale of the challenge confronting the country’s financial sector.

It also noted that the regulatory environment is becoming more demanding, with the Central Bank of Nigeria issuing 17 regulatory actions within 14 months covering cybersecurity, anti-money laundering and data protection, including six compliance deadlines scheduled between March 2026 and March 2028.

According to the report, a N15.42 billion regulatory fine imposed on a leading commercial bank in 2025 demonstrated that non-compliance now threatens not only financial performance but also international correspondent banking relationships.

Commenting on the report, Group Managing Director of Smartcomply, Gbemisola Osunrinde, said the decline in reported fraud should not be interpreted as a reduction in underlying risk.

“The fall in reported fraud is welcome, but it is also a warning. When reporting drops faster than fraud, the risk does not leave the system, it leaves the record,” she said.

According to Osunrinde, financial institutions will need stronger compliance architecture, proactive fraud detection systems and better governance rather than simply investing in standalone AI tools to meet evolving regulatory requirements.

She added that Adhere was designed to help banks and fintech companies comply with Central Bank of Nigeria regulations while providing transaction-level visibility capable of detecting suspicious activities that periodic reviews may miss.

Speaking at the forum, Assistant Inspector General of Police, Dr Uche Henry, described financial crime as a growing national security challenge capable of undermining public confidence in banks, law enforcement agencies and the wider economy.

He said cybercriminals have shifted from traditional bank robberies to sophisticated technology-enabled attacks involving artificial intelligence, ransomware, deepfakes, SIM swap fraud, insider collaboration and social engineering.

According to him, financial institutions and law enforcement agencies must equally deploy AI-powered technologies to detect and prevent emerging fraud threats.

Henry identified insider threats within banks and telecommunications companies as a major concern, alleging that some employees assist cybercriminals by compromising banking and telecom systems.

He also cited lengthy legal procedures required to freeze suspicious accounts as a major obstacle to effective investigations, saying delays often allow criminals to transfer stolen funds before authorities can intervene.

The police chief warned that proceeds from financial crimes increasingly fund terrorism, kidnapping, human trafficking, drug trafficking and other organised crimes, adding that cybercrime could become one of Nigeria’s biggest security threats within the next decade if left unchecked.

He called for stronger collaboration among banks, telecommunications operators, regulators and law enforcement agencies, alongside faster enforcement processes, greater public awareness and wider adoption of AI-powered fraud detection technologies.

Earlier this year, the Central Bank of Nigeria (CBN) also expressed concerns about rising electronic fraud threats, urging banks and other financial institutions to take prompt action to safeguard Nigeria’s expanding digital payments ecosystem.

According to the apex bank, emerging fraud patterns were becoming more complex and required industry-wide coordination.

It added that threats such as social engineering, SIM-swap abuse, insider compromise, and Authorised Push Payment scams were placing increasing pressure on Nigeria’s payment systems.