Nigeria’s digital economy faces trust test

Nigeria’s fast-growing digital economy is facing a new challenge, convincing consumers that the platforms powering their financial transactions, businesses, and daily services are safe enough to trust.

With more than 122 million internet users and one of Africa’s most advanced fintech ecosystems, Nigeria has emerged as a leader in digital payments and financial innovation. But sustaining that growth will depend increasingly on whether consumers believe their personal data, money, and identities are protected.

“Trust is no longer a soft reputational asset; it is the critical infrastructure of the digital economy,” said Microsoft Chief Security Advisor and experienced information technology and information security executive, Kerissa Varma. “It is the factor that will determine whether Nigeria’s digital momentum translates into lasting, inclusive growth.”

The warning comes as fraud, identity theft, and cybercrime increasingly influence how Nigerians interact with digital services. A growing number of consumers are becoming cautious about online transactions, forcing businesses, banks, and technology companies to treat cybersecurity as part of their customer experience rather than merely an operational cost.

The Global Anti-Scam Alliance’s State of Scams in Nigeria 2026 study highlights the scale of the challenge. It found that 84 per cent of surveyed Nigerian adults encountered a scam attempt in the previous year, while 22 per cent suffered financial or data losses. Only four per cent reported the incidents to authorities, reflecting persistent challenges around reporting and enforcement.

For Nigerian businesses, the implication is significant: a failure to protect customers could translate into lost trust, reduced adoption, and weaker competitiveness.

The threat landscape has expanded alongside Nigeria’s digital growth. Fraud is no longer viewed solely as a cybersecurity problem but as a potential constraint on economic expansion.

The Central Bank of Nigeria’s Financial Stability Report 2024 showed a 45 per cent increase in financial fraud cases within one year, with 70 per cent of reported losses linked to digital channels.

The rise in fraud has prompted concerns among policymakers about its impact on consumer confidence and the credibility of Nigeria’s financial system.

For digital businesses, the challenge is becoming commercial. Customers are increasingly judging platforms not only by speed, convenience, and pricing but also by how effectively they protect their information.

The TransUnion H1 2026 Digital Fraud Trends in Africa report found that confidence in personal data security has overtaken product quality as a leading factor influencing consumer decisions when choosing digital platforms.

This shift means security is becoming part of the value proposition offered by banks, fintech companies, and online businesses.

Cybercriminals are increasingly moving away from traditional attacks that attempt to break into systems and towards methods that exploit legitimate credentials, according to Microsoft’s Digital Defense Report.

“Attackers are increasingly logging in rather than breaking in,” Microsoft said in its 2025 Digital Defense Report, highlighting the growing importance of identity protection.

Artificial intelligence is accelerating the threat. AI tools are making it easier for criminals to create convincing fake identities, automate phishing attempts, and manipulate verification systems.

Microsoft’s report identified a 195 per cent increase in AI-generated identity documents being used to bypass verification checks, while AI-driven phishing campaigns have become significantly more effective than traditional methods.

Deepfake-related incidents in Africa also increased sharply between the second and fourth quarters of 2024, adding pressure on organisations that rely on digital identity systems.

In Nigeria’s financial sector, social engineering remains one of the most common fraud techniques. The Nigeria Inter-Bank Settlement System has identified tactics such as phishing, SIM swap fraud, and account compromise as major threats affecting digital payments.

The exposure extends beyond financial institutions. Cybersecurity firm Surfshark recorded more than 150,000 compromised Nigerian accounts in the first half of 2025.

Despite rising threats, Nigeria’s experience also shows that digital expansion and stronger security measures can progress together.

Data from NIBSS showed that digital payment fraud losses declined to N25.85bn in 2025, representing a 51 per cent drop from the previous year. Fraud incidents also fell from 123,918 in 2021 to 67,518 in 2025.

Experts say the decline reflects increased cooperation between banks, fintech companies, and consumers, alongside stronger monitoring and fraud prevention systems.

The industry’s progress suggests that investment in security can deliver measurable economic benefits rather than simply increase operating costs.

Improved identity systems have also played a role. Bank Verification Number registrations continued to grow, strengthening Nigeria’s digital identity framework and helping financial institutions detect suspicious activity.

For Nigerian companies, the next phase of digital growth will require treating trust as a strategic priority.

The Microsoft executive argued that cybersecurity can no longer be left solely to technical teams but must become a leadership issue involving executives, regulators, and boards.

Organisations will need to invest in real-time fraud detection, stronger identity verification, phishing-resistant authentication, and greater intelligence-sharing across sectors.

However, improving security will also require addressing under-reporting. NIBSS data showed fraud reporting declined by 34 per cent in the final quarter of 2025, reducing visibility into emerging threats.

As Nigeria’s digital economy expands, the ability to build and maintain trust could determine which companies succeed in winning consumer loyalty.

The country has already demonstrated its ability to scale digital services. The next challenge is ensuring that millions of Nigerians feel confident enough to continue using them.