Rising fraud concerns in Nigerian banks: FirstBank denies allegations as CBN strengthens oversight

By Osasome, O.C and Nana Theresa Timothy

Nigeria’s financial sector has been rocked by increasing allegations of fraud. Expectedly, this is raising concerns about operational vulnerabilities and customer trust in banks. The latest controversy surrounds First Bank of Nigeria (FirstBank), which recently dismissed claims of a N7 billion fraud incident as “entirely unfounded.”

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In a report published by an online platform, anonymous sources alleged significant financial misconduct within the institution. However, FirstBank, in an official statement has refuted the claim. Acting Group Head of Marketing and Corporate Communications, Olayinka Ijabiyi, categorically denied the allegations. FirstBank labeled the story as baseless and false.

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“We have been made aware of a recent publication by Tech Cabal containing allegations of fraud involving our institution. We wish to categorically state that the story is entirely unfounded and not supported by any factual evidence,” the statement read.

The bank emphasised its commitment to operational integrity. It assured customers that its security systems remain robust, with no breaches reported affecting customer accounts.

Rising Fraud Cases in Nigeria’s Financial Sector

The allegations against FirstBank are part of a broader wave of fraud cases impacting Nigeria’s financial institutions. The Central Bank of Nigeria (CBN) recently revealed an uptick in cybercrime and internal fraud cases. The regulator cited technological advancements and the growing complexity of digital banking as contributing factors.

In 2023 alone, Nigerian banks reported losses running into billions due to fraudulent activities.. Consequently, there have been urgent calls for enhanced oversight and regulatory reforms.

CBN’s Proactive Measures

In October 2024, Mrs. Hakama Sidi-Ali, Acting Director of Corporate Communications, announced that the CBN had entered into Memoranda of Understanding (MoUs) with foreign regulators. The MoU will help to enhance oversight and collaboration for Nigerian banks operating overseas subsidiaries. To safeguard financial system stability across jurisdictions, the CBN has strengthened its supervisory framework by incorporating regular stress testing, risk-based supervision, and early warning systems.

As part of its efforts to combat fraud in the banking industry, particularly with the growing adoption of electronic payment systems, the CBN established the Nigeria Electronic Fraud Forum (NeFF) in 2015. Additionally, the apex bank issued a circular mandating financial institutions to set up dedicated fraud desks to curb fraudulent activities within the sector.

What the CBN is doing

In response to the escalating fraud cases, the CBN has introduced several measures to strengthen financial security.

Improved Regulation: The apex bank has mandated stricter compliance with anti-fraud guidelines, including Know Your Customer (KYC) requirements and enhanced due diligence procedures.
Cybersecurity Upgrades: Banks are now required to adopt advanced cybersecurity tools and conduct regular audits to identify vulnerabilities in their systems.
Fraud Reporting Framework: The CBN has established a centralized fraud monitoring platform, enabling real-time reporting and tracking of suspicious activities across financial institutions.
Customer Awareness Campaigns: The CBN has launched nationwide campaigns to educate customers about common fraud schemes, urging them to remain vigilant.

FirstBank’s Legacy of Trust

FirstBank, established in 1894, is one of Nigeria’s oldest and most reputable financial institutions. With a presence spanning three continents and a customer base exceeding 23 million, the bank has consistently prioritized innovation and customer trust.

Despite the recent allegations, FirstBank has reaffirmed its dedication to safeguarding customer interests and maintaining its legacy of integrity.

Building Confidence in the Banking Sector

As fraud concerns rise, both financial institutions and regulators face increasing pressure to restore confidence in Nigeria’s banking sector. Proactive measures by the CBN, coupled with transparency from banks like FirstBank, are vital to ensuring a secure and trustworthy financial environment.

For customers and stakeholders, vigilance remains key. Reporting suspicious activities and staying informed about protective measures can play a significant role in mitigating fraud risks.