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Rising Cyber Threats and Authentication in Nigeria

Nigeria’s financial sector is under escalating cyber threats, causing substantial fraud losses. In Q1 2024 alone, fraud losses have reached billions of Naira. With 70% of Nigerian customers demanding mobile banking experiences as intuitive as familiar social media apps, banks face the dual challenge of enhancing security while maintaining frictionless user logins.

Traditionally, Nigerian banks relied on the Bank Verification Number (BVN) system introduced in 2014, authenticating 64 million customers with basic biometrics. However, cybercriminals now bypass basic biometric checks through sophisticated attacks involving synthetic identities and deepfake manipulations. To counteract these, enterprises are adopting advanced authentication methods such as biometrics combined with passkeys.

Why Biometrics and Passkeys Are Crucial

Biometrics are now crucial due to three core reasons:

  1. Evolving Fraud Techniques: Fraudsters increasingly use tactics that undermine traditional authentication frameworks.
  2. Customer UX Expectations: Approximately 64% of users abandon applications that have cumbersome and slow login experiences.
  3. Regulatory Changes: Recent Central Bank of Nigeria (CBN) regulations require biometrics for high-value transactions, creating compliance requirements for banks and fintech entities.

Furthermore, passkeys have emerged as a robust and frictionless alternative, employing public-key cryptography stored securely on the user’s own device. Unlike centralized password databases, passkeys do not expose sensitive credentials to server-side hacks or data leaks, providing a layer of resilience in authentication.

Implementing Advanced Biometric Authentication in Nigerian Banks

Several Nigerian banks have already integrated advanced biometric solutions:

  • Access Bank launched facial recognition ATMs and biometric payment solutions, significantly improving the user experience for less tech-savvy individuals.
  • Polaris Bank utilizes facial authentication within their VULTe platform, saving around ₦480 million annually in manual verification costs.
  • GTBank emphasizes user transparency, publishing clear consent notices for biometric data handling, yet facing challenges posed by global data safety regulations such as GDPR.

Governmental support has also emerged, with a $45.5 million World Bank investment aiming to enroll 200 million citizens into the National Digital ID program by 2025. Such initiatives complement biometric-based authentication and digital identity projects within the country’s expanding banking infrastructure.

Persistent Challenges with Biometric Solutions

Yet biometric systems in Nigeria must overcome persistent hurdles. False rejection rates due to poor lighting or outdated biometric database content currently stand between 6–13%, negatively impacting users. Banks like UBA are exploring multimodal authentication methods (face and voice combined) to significantly reduce these rejection rates.

High costs are also problematic: deploying advanced biometric hardware (such as 3D facial sensors) involves significant investment, an estimated $8-$15 per device installed at physical branches.

Moreover, strict, overlapping regulatory frameworks pose significant challenges, especially for banks with international operations. Nigeria’s Data Protection Act mandates stringent biometric storage and encryption methods, whereas international banks must simultaneously comply with global standards like GDPR.

Real-world Example: Wema Bank’s Security Transformation

Wema Bank illustrates measurable benefits of advanced biometric integration. Before adoption, the bank annually suffered ₦685 million losses from SIM-swap and phishing fraud. Through liveness detection and advanced biometric verification integrated into their mobile apps, fraud decreased by 89% in the first half of 2024, with customer support costs also dropping significantly.

This showcases the potential of biometric systems to efficiently address security threats and streamline bank operations, balancing user convenience with robust fraud prevention tools.

The Emerging Trend of Passkeys

Banks are exploring passkeys as a complementary authentication strategy. Because passkeys rely on cryptographic keys stored securely in user devices, banks benefit by avoiding expensive infrastructure to safely store extensive biometric datasets, significantly reducing breach risk and compliance complexity.

Passkeys also enhance usability, making authentication seamless for lower-risk scenarios, while stronger biometric checks can remain active for high-risk transactions.

Future Opportunities and Insights

Looking ahead, global benchmarks like India’s Aadhaar biometric system , which includes over 1.4 billion users, underline the future promise of multi-modal authentication combined with innovative solutions like passkeys.

Nigeria has vast opportunities with public-private partnerships and investments that aim for nationwide biometrics and digital ID enrollments, promising multidimensional benefits such as reduced fraud, enhanced trust, and improved UX.