Data-driven analytics offer new hope against financial fraud in Nigeria

A new study by finance professional, Kosisochukwu Ekenta has spotlighted data-driven analytics and modern financial methodologies as the country’s best hope for restoring transparency and public trust in financial reporting.

The study seeks to strengthen Nigeria’s financial integrity and curb the rising tide of economic fraud.

Ekenta, who holds a master’s degree in finance from the University of Utah, United States, and is licensed with SIE, Series 7, Series 63, and ICAN (ACA), has worked across global and Nigerian institutions including Morgan Stanley (E*TRADE), Veritas Kapital Assurance, and Parker Randal Offor & Co.

She said her research demonstrates how advanced analytics, artificial intelligence (AI), and blockchain technology can transform Nigeria’s fight against financial fraud.

“The solution lies in making data our first line of defense,” she said. “When financial systems rely on continuous data monitoring, real-time anomaly detection, and predictive modeling, fraudsters lose their hiding place.”

At the heart of Ekenta’s study is a model that proposes using machine learning algorithms and data integration systems to detect financial fraud before it happens. By analyzing millions of transaction records, customer profiles, and audit trails in real time, these systems can flag suspicious activities that human auditors might overlook.

For example, an algorithm trained on historical fraud cases can instantly detect unusual patterns such as duplicate transactions, fake supplier invoices, or irregular payroll payments. Over time, it becomes “smarter,” learning to predict potential fraud even before it occurs.

Beyond banking, this technology can be applied across public finance, procurement, and taxation systems, sectors often vulnerable to corruption. The integration of blockchain adds another layer of protection by creating immutable digital ledgers where every transaction is permanently recorded and traceable.

“Once blockchain is embedded into our financial reporting infrastructure,” Ekenta noted, “the chances of altering records or covering up illicit payments drop drastically. That’s the kind of transparency Nigeria urgently needs.”

The need for such innovation is pressing. Financial fraud remains one of the most pervasive and destructive challenges facing Nigeria’s economy. Defined as the deliberate falsification, misrepresentation, or concealment of information for illicit gain, fraud has become systemic—cutting across government agencies, financial institutions, and the private sector.

Its effects are far-reaching: loss of investor confidence, economic distortions, and erosion of public trust. According to the Nigeria Inter-Bank Settlement System (NIBSS), financial institutions lost ₦17.6 billion ($11.2 million) to fraud in 2023 alone—a staggering 496% increase from ₦2.96 billion in 2019. Independent estimates suggest the actual figure could be much higher.

In July 2025, fraud cases surged again by 45%, driven largely by digital banking scams and unregulated virtual asset platforms. These losses not only weaken the financial system but also push legitimate transactions underground, distorting monetary policy and economic data.

“Fraud is not just a financial problem, it’s a governance problem,” Ekenta warned. “When financial records cannot be trusted, economic planning becomes guesswork.”

To effectively address this challenge, Nigeria needs to adopt real-time systems that can quickly detect unusual financial activities, strengthen oversight of virtual asset platforms, and enforce stricter KYC and AML regulations. Collaboration between regulators, banks, fintech companies, and telecom providers is essential, alongside raising public awareness, improving consumer protection, and ensuring stronger judicial enforcement. With these measures, Nigeria can curb fraud, restore trust, stabilize markets, and attract investment, making fraud prevention a cornerstone of economic resilience.

Nigeria’s experience during the COVID-19 pandemic offers a sobering example. Billions of naira were disbursed through relief programs meant to cushion households and small businesses. However, weak oversight allowed ghost beneficiaries and duplicate applications to flourish.

While the U.S. Small Business Administration faced similar fraud attempts, its stronger data infrastructure allowed faster detection and recovery. In contrast, Nigeria’s lack of real-time monitoring led to widespread abuse that remains largely unaccounted for.

Similarly, the manipulation of financial statements by some Nigerian banks to conceal insolvency underscores the weakness of traditional auditing systems. Manual audits often detect discrepancies long after the damage is done. In contrast, data-driven forensic accounting models could have automatically compared asset valuations, detected inconsistencies, and flagged irregularities early—potentially saving institutions from collapse.

The consequences of unchecked fraud extend beyond Nigeria’s borders. Persistent financial irregularities have eroded global confidence in Nigerian transactions. Many international partners now subject cross-border payments to stricter scrutiny or outright restrictions.

This lack of trust has slowed foreign direct investment, raised the cost of doing business, and damaged Nigeria’s reputation as Africa’s largest economy.

Ekenta’s model offers a way out: “When we deploy real-time analytics and transparent reporting systems, Nigeria signals to the world that it takes financial integrity seriously. That’s when investor confidence begins to return.”

To sustain the gains of a data-driven transformation, Ekenta’s study outlines a comprehensive roadmap anchored on technology, transparency, and collaboration. At the core of the recommendations is the need to institutionalize AI-driven audits across all levels of government. By integrating predictive algorithms into federal and state audit systems, the study suggests Nigeria can achieve continuous, real-time monitoring of financial activities, detecting irregularities before they escalate into large-scale fraud.

Complementing this is a call to adopt blockchain technology in public finance, ensuring that all tax filings, procurement contracts, and subsidy payments are logged on tamper-proof digital ledgers accessible to regulators and citizens alike.

The report also emphasizes the establishment of a Fraud Risk Framework that enables agencies to detect and mitigate fraud proactively rather than reactively. Such a system, it notes, would embed risk assessment protocols into everyday financial operations, closing loopholes that allow corruption to thrive. Beyond institutional mechanisms, the study advocates public-private collaboration, urging partnerships with fintech companies and universities to strengthen Nigeria’s data infrastructure and promote research-driven solutions to economic crimes.

Building human capacity is another key recommendation. The study calls for training a new generation of forensic analysts, compliance officers, and digital auditors who can sustain innovations and uphold accountability in both public and private sectors. In addition, it highlights the importance of enhancing consumer protection through a unified national strategy to combat online scams and improve data collection on fraud incidents.

Finally, the report underscores the necessity of global partnerships in driving Nigeria’s transition to data-driven compliance. It recommends collaboration with international bodies such as the IMF, World Bank, and other development partners to secure funding, technical expertise, and policy alignment. Together, these reforms, the study concludes, could position Nigeria as a regional model for financial integrity in the digital age.

Ultimately, the study concludes that data-driven analytics and methodology offer the most promising route to ending Nigeria’s financial fraud epidemic. The technology not only detects corruption—it prevents it. It creates a financial ecosystem where transparency is automatic, not optional.

Fraud, Ekenta argues, is more than an economic offense; it is a threat to governance, development, and national credibility. But with technology on its side, Nigeria can rewrite its story, from one of recurring scandals to one of innovation, integrity, and global confidence.

“We can’t fight 21st-century fraud with 20th-century tools,” she said. “If Nigeria embraces data, it will finally have the power to see—and stop—what has long been hidden.”