In Nigeria today, fraud is no longer just a banking or fintech problem; it’s everyone’s problem. No sector is immune, from large organisations to hospitals, government agencies, retailers, and nonprofits. Recent headlines make it painfully clear: fraudsters are targeting organisations of all sizes, and they’re getting smarter, faster, and bolder. For many Nigerian business owners, fraud still feels like a distant threat, something that only happens to banks, telcos, or multinationals. But the truth is, no business is too small to be targeted.
Between 2020 and 2023, fraud attempts in Nigeria surged by over 186 percent, according to the Nigerian Inter-Bank Settlement System (NIBSS), with phishing, account takeovers, card fraud, and insider schemes leading the charge. This mirrors global patterns: the Association of Certified Fraud Examiners estimates that organisations worldwide lose about 5 percent of annual revenue to fraud, amounting to over $4.7 trillion. Similarly, PwC’s 2023 survey also revealed that nearly half of organisations experienced fraud in the past two years, and companies are projected to lose over $10.5 trillion to cybercrime annually by 2025, and Nigeria is very much part of this story.
The challenge is that while technology races forward, many organisations are still relying on outdated, manual processes to detect fraud; that is, if they have any fraud detection at all.
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Why fraud has become an organisation-wide threat
The nature of fraud itself has changed. We’re no longer dealing with isolated actors sending suspicious emails from internet cafés. Today’s fraudsters are part of sophisticated, often transnational networks using stolen credentials, deep-fakes, bots, malware, and social engineering to penetrate systems and exploit weaknesses. They are targeting every layer of the organisation, from finance teams with fake invoices and business email compromise (BEC) attacks to HR departments with payroll scams to procurement teams through vendor impersonation. And let’s not forget customers, who are increasingly falling victim to phishing and account hijacking.
Insider threats, whether deliberate or accidental, have emerged as one of the most critical risks, accounting for as much as 20–25 percent of fraud incidents. This creates a perfect storm: while organisations focus outward, the threat may already be inside their walls. In fact, Verizon’s 2024 Data Breach Investigations Report found that 74 percent of breaches involve the human element, highlighting how social engineering, mistakes, and insider actions amplify the fraud risk.
However, it is tempting to think of fraud purely in financial terms, but the true cost cuts much deeper. In an era where digital trust is currency, failing to prioritise fraud detection is a costly mistake. Beyond the immediate monetary loss, organisations face reputational damage that can take years to repair. Studies show that 60 percent of small businesses that experience a major cyber or fraud incident shut down within six months. Why? Because customers, suppliers, and partners lose faith. Once trust is lost, customers and partners may quietly walk away. And even for larger firms, the financial blow can be devastating; IBM’s 2023 Cost of a Data Breach Report puts the average breach cost at $4.45 million, marking a 15 percent rise in just three years. If people believe you can’t safeguard their data, transactions, or identities, they’re unlikely to give you a second chance.
Operationally, the disruption can be enormous, with teams pulled away from their core work to investigate, recover, and patch gaps. And with increasing regulation around data protection and financial accountability, organisations risk penalties if they fail to prevent or properly respond to fraud. In short, fraud has evolved from being just a cost of doing business to a direct threat to organisational survival. Besides protecting revenue, companies that invest in fraud detection gain a competitive edge. Customers want to know that their money and data are safe. By making security part of your brand promise, you build loyalty and differentiate yourself in a crowded market.
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So, what can organisations do?
First, they must invest in real-time monitoring. Modern fraud happens at machine speed, and detecting it with spreadsheets or after-the-fact reconciliations simply doesn’t cut it anymore. Tools powered by artificial intelligence and machine learning can help spot anomalies and suspicious patterns before the damage is done. Leveraging AI-powered fraud detection systems is no longer optional; it’s fast becoming an industry standard. These systems can analyse massive amounts of data in real time, spotting suspicious patterns and flagging them before damage is done. Identity verification needs a serious upgrade, too. Multi-factor authentication should no longer be treated as optional or even entirely sufficient, whether for employee systems, vendor platforms, or customer portals. Stronger identity controls make it much harder for attackers to gain a foothold.
But technology alone isn’t enough. People remain the weakest link, which is why regular employee training on phishing, social engineering, and fraud awareness is essential. Many organisations neglect this layer, assuming their teams will “just know” when something feels off, but the reality is that well-crafted fraud schemes are designed to bypass intuition. Similarly, leveraging User and Entity Behaviour Analytics (UEBA) tools to detect and prevent insider threats is also important.
Internal processes also need tightening. Simple measures like separating financial duties, requiring dual approval for sensitive transactions, and performing periodic audits can go a long way toward catching or preventing fraud.
Collaboration is another piece of the puzzle. Organisations should not isolate themselves but instead engage in industry-specific fraud intelligence sharing, working closely with regulators, law enforcement, and sector peers to stay ahead of emerging threats.
Perhaps most importantly, organisations must stop assuming they can fully eliminate fraud and instead plan for when, not if, it strikes. That means having an incident response plan that outlines clear roles, escalation paths, and communication strategies. As the World Economic Forum warns in its Global Risks Report, cybercrime, including fraud, is among the top 10 threats to global stability over the next decade, making it clear that the stakes are no longer just operational but existential.
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At the heart of all this is leadership; fraud prevention is no longer just the domain of IT departments or compliance officers; it’s a boardroom issue. Executives must treat fraud as a strategic risk, allocate resources accordingly, and set the tone from the top so that resilience becomes part of the organisation’s culture.
In today’s landscape, the question is no longer whether your organisation will face a fraud attempt – it’s when. The organisations that will thrive are those that prepare, adapt, and turn trust into a competitive edge.
Jonathan is a cybersecurity architect with years of experience helping SMEs and enterprises strengthen their digital defences and navigate the complex world of cyber risks. He can be reached at [email protected].
