₦5 Billion Stolen From 3 Fintechs In Just 8 Months By Fraudsters

Nigerian fintechs have suffered a significant financial blow, losing approximately ₦5 billion within just eight months.

This loss stems from a series of cyberattacks orchestrated by hackers and fraudsters, revealing vulnerabilities within the industry.

During an astonishing eight-month period, Nigerian fintech companies fell victim to a string of devastating breaches, resulting in a collective loss exceeding ₦5 billion to crafty fraudsters.

Freshreporters news understands that these relentless attacks on the fintech sector have raised concerns not only about its security but also about a concerning surge in insider involvement in financial crimes.

The digital battleground for these fintechs intensified as hackers and fraudsters, armed with sophisticated tactics and exploiting internal betrayals, targeted system vulnerabilities.

Even well-secured payment platforms suffered when connected to other fintechs lacking sufficient cybersecurity measures.

According to a report by Nairametrics, the escalating wave of fraudulent activities plaguing the Nigerian financial sector is primarily attributed to the rise in insider jobs, a challenge forcing fintech companies to strengthen their defenses.

Darlington Onyeagoro, CEO of a prominent Nigerian digital bank, Aladin, shared a distressing account of hackers infiltrating a Nigerian fintech, making off with over ₦800 million.

What’s particularly troubling is the revelation that insiders may have played a significant role in these fraudulent activities, posing a formidable challenge for fintech firms across Nigeria. Additionally, breaches have exposed a worrying trend: attacks on interconnected sister fintech platforms, potentially compromising even the most secure payment platforms.

The most recent victim, crypto platform Patricia, has been dealing with payment disruptions following a significant loss of funds to hackers.

Patricia suspended withdrawals after disclosing the compromise of Bitcoin and naira assets, resulting in an undisclosed financial loss estimated at around $2 million.

However, Hanu Fejiro, the platform’s founder and CEO, has assured customers that reimbursement will commence on November 20, 2023.

Similarly, Flutterwave, another prominent fintech company, experienced a hacker attack earlier this year, resulting in the theft of approximately ₦2.9 billion in customer funds. While the platform urged users to enhance safety protocols, it refrained from revealing the exact extent of the loss.

Shockingly, the details of the hack only emerged through court documents, which disclosed a petition by Flutterwave’s legal counsel to the police, seeking assistance in freezing 107 bank accounts across 27 banks to recover the stolen funds.

This disturbing trend of fintech breaches reflects a broader issue in the financial sector. According to the Financial Institutions Training Centre (FITC) Fraud and Forgeries Report, Nigerian commercial banks also suffered substantial losses, totaling ₦5.79 billion due to fraudulent activities in the second quarter of 2023.

This staggering figure represents an alarming 1,125.03% increase compared to the ₦472 million lost in the first quarter of the year. The report also highlights the disturbing rise in insider involvement, with insider activities surging by 20.55% during the second quarter of this year.

The fintech industry in Nigeria urgently requires robust security measures to combat the growing threat of cyberattacks and insider breaches. Otherwise, financial losses are likely to continue mounting…[CONTINUE READING HERE]>>