Nigeria's oldest bank, First Bank, has been hit by a massive fraud incident, with unknown persons stealing ₦7 billion from customer accounts. According to sources with direct knowledge of the matter, the incident involved the unauthorized diversion of funds from several customer accounts, with the stolen funds then being moved to multiple bank accounts, including those of two fintech companies.

The scope and complexity of the incident highlight the increasingly sophisticated nature of fraud in Nigeria's financial services sector. Nigerian banks lost ₦43 billion to fraud in Q2 2024, yet those numbers are likely underreported. Only 60 of 163 financial institutions in Nigeria reported fraud cases, according to a Nigeria Inter-Bank Settlement System (NIBSS) report; many choose not to report incidents over fear of reputational harm.

The fraud incident at First Bank, which reportedly began several months ago, went undetected for months, suggesting significant internal control gaps. This incident is not the first time First Bank has been hit by fraud. In May 2024, TechCabal reported that a First Bank employee had fraudulently diverted ₦40 billion over a two-year span before eventually being discovered. Two people with direct knowledge of the matter said the bank's comprehensive audit showed that the total amount the employee diverted was around ₦60 billion. That incident led to the dismissal of 100 employees and was thought to be connected to the abrupt exit of the bank's CEO.

First Bank did not respond to a request for comments on this story. However, according to two people with knowledge of the matter, the bank has begun the recovery process and reported the case to law enforcement. Banks and fintech typically work with the police and courts to recover stolen funds. It remains unclear if First Bank has taken legal action over the matter.

The incident raises concerns about the security measures in place at Nigerian banks and the need for more robust fraud detection and prevention systems. It also highlights the importance of transparency and accountability in the financial services sector. As the incident continues to unfold, it remains to be seen what measures will be taken to prevent such incidents in the future and to hold those responsible accountable.

The incident is a stark reminder of the need for increased vigilance and cooperation between financial institutions, regulators, and law enforcement agencies to combat fraud and protect customers' funds. It is also a wake-up call for customers to be more aware of their account activities and to report any suspicious transactions promptly.

As the investigation into the incident continues, it is essential to ensure that those responsible are held accountable and that measures are put in place to prevent such incidents from occurring in the future. The incident serves as a stark reminder of the need for a more robust and transparent financial services sector in Nigeria.