Cyber Threats and Fraud Reduction Strategies in Financial Services: A Nigerian Perspective

Recent cyber threats targeting financial services have escalated in Nigeria, particularly affecting Lagos where a significant portion of online transactions occur. A mixed-methods approach combining quantitative data from transaction records and qualitative insights from interviews with stakeholders was employed. The analysis revealed a monthly average of 15% customer loss attributed to online fraud across the financial sector in Lagos. Interviews identified critical vulnerabilities such as weak authentication protocols and inadequate employee training. Current strategies focusing on enhanced cybersecurity measures and improved employee awareness are insufficient; additional regulatory oversight is needed to mitigate losses effectively. Implementing a comprehensive cybersecurity framework, including AI-based threat detection systems, should be prioritised. Stakeholders must collaborate to address systemic issues. Model estimation used θ̂=argminθ∑ᵢ(yᵢ,f_θ(xᵢ))+λθ₂², with performance evaluated using out-of-sample error.