Cybersecurity experts have raised alarms over the urgent need for Nigerian banks to increase investments in cyber defenses as financial fraud escalates.
According to the Nigeria Inter-Bank Settlement System (NIBSS), Nigerian financial institutions lost ₦52.26 billion to fraud in 2024, compared to ₦17.67 billion in 2023, a staggering 195% year-on-year increase.
At a cybersecurity forum organized by Bitscape, experts noted that the rapid advancement of AI and cloud technologies has given hackers more sophisticated tools, raising the stakes for banks.
Banks Must Keep Pace With Sophisticated Hackers
Mr. Nonso Magulike, Executive Director of Bitscape, stressed that while some Nigerian banks are investing in cybersecurity, more effort is required to counter evolving threats.
“The evolution of cloud and AI is moving very quickly. This means that bad actors can do things at a rate that is quite high. So, banks need to keep investing,” Magulike said.
He emphasized that cybersecurity goes beyond software and firewalls, requiring a holistic approach involving people, technology, and processes.
Magulike also pointed out that smaller firms often underestimate risks or assume security is too costly, while in reality, cost-effective cybersecurity solutions are available.
AI: A Double-Edged Sword in Cybersecurity
AI technology emerged as a central theme during the forum.
- Mr. Frank Egwakhide, Chief Information Security Officer at DLM Capital, described AI as a two-edged sword, capable of both strengthening defenses and enabling more sophisticated attacks.
“AI is like a two-edged sword. Hackers are already using it, so organisations must also use AI for detection and prevention. It has to be AI versus AI,” Egwakhide explained.
- Similarly, Mr. Ayodeji Faleto, Head of Compliance at Crystal Finance, noted that hackers now deploy AI-driven methods to infiltrate systems. He urged businesses to adopt ethical AI defenses to match attackers’ sophistication.
The Role of Compliance and Regulation
Faleto further stressed that compliance should not be a box-ticking exercise.
“Regulators are trying their best, but corporate organisations must ensure that compliance goes beyond ticking boxes. The real question is: even when regulators are not watching, can your systems stand the test of time?” he said.
Experts concluded that while regulators provide oversight, Nigerian banks and businesses must go beyond minimum compliance and actively invest in cybersecurity resilience.
Final Takeaway
With financial fraud in Nigeria’s banking sector surging nearly 200% in one year, the call for stronger cybersecurity investment has never been louder. Experts agree that banks must adopt AI-driven defenses, holistic risk management, and deeper compliance measures to safeguard critical financial systems.
