When 8 Million Customers Trust You, Safety Can’t Be an Afterthought
Nigeria’s rapid shift to digital banking is transforming how millions manage money—but it is also placing growing pressure on the industry to strengthen consumer protection.
Over the past decade, the country has witnessed a dramatic decline in cash-based transactions, replaced by mobile apps, instant transfers and USSD services.
Recent data highlights the scale of this transformation: point-of-sale (POS) transactions hit a record ₦18 trillion in 2024, marking a 69 per cent year-on-year increase, while POS terminals more than doubled to 5.5 million. Mobile banking has also become the most widely used financial service, with four in five users accessing it within a 90-day period.
While this growth reflects significant progress in financial inclusion and technology adoption, concerns over safety and consumer trust are becoming increasingly prominent.
A 2024 Nigeria Consumer Protection Survey by Innovations for Poverty Action revealed that nearly one in four users of digital financial services experienced unexpected charges, fees or fraud attempts within the past year. Notably, only about half of affected users sought formal redress, pointing to declining confidence in complaint resolution mechanisms.
Fraud statistics further underscore the challenge. Data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that losses to digital payment fraud rose sharply to ₦52.26 billion in 2024. Although a major single incident contributed significantly to the figure, overall fraud losses have surged by 196 per cent over the past five years, even as the number of reported cases declined. This trend suggests fewer but more financially damaging fraud incidents.
E-commerce and internet banking platforms remain the most vulnerable channels, followed by POS, mobile and web platforms. Social engineering—where fraudsters manipulate unsuspecting customers—continues to dominate, while insider involvement by bank staff has been identified by NIBSS as a major structural risk within the system.
Analysts say the core issue lies in the gap between rapid digital expansion and the slower pace of consumer protection systems. Without deliberate efforts to balance convenience with security, the ecosystem remains vulnerable to exploitation.
However, there are signs of progress. Nigeria’s removal from the Financial Action Task Force (FATF) grey list in 2025 signals improved financial safeguards. Additionally, the Central Bank of Nigeria’s rollout of risk-based cybersecurity frameworks in 2024, alongside enforcement actions exceeding ₦15 billion in penalties, reflects a tougher regulatory stance on compliance and consumer protection.
Industry stakeholders emphasise that the most effective safeguards are often invisible to customers. Advanced systems now monitor transactions in real time, detect anomalies and prevent suspicious activities before losses occur—shifting the focus from reactive responses to proactive protection.
Union Bank is cited as an example of this approach. Across its digital platforms—UnionMobile, its USSD service (*826#) and the Union360 suite—the bank reported strong customer satisfaction and loyalty scores in 2025. According to the bank, these outcomes are driven not just by convenience but by sustained investment in security infrastructure, proactive monitoring systems and a corporate culture anchored on its ICARE values, which prioritise customer protection.
The bank also reinforced this commitment during World Consumer Rights Day in March, reminding employees of their responsibility to uphold customer rights and ensure secure service delivery.
Experts agree that trust remains the cornerstone of banking. As Nigeria’s digital financial ecosystem continues to expand, the next phase of growth will depend not only on accessibility and innovation but on the industry’s ability to guarantee safety.
Ultimately, stakeholders say financial inclusion and financial security must go hand in hand, as both are essential to sustaining long-term confidence in the system.
