Do Digital Frauds Influence Banks’ Profitability in Nigeria? A Review.

Abstract

As the adoption of digital banking systems continues to grow both in Nigeria and globally, the incidence and complexity of digital fraud have also increased, posing significant threats to financial stability and business operations. These challenges often lead to heightened anxiety and uncertainty among users. In response to this concern, the present study investigates the impact of digital fraud on the profitability of banks in Nigeria. The research relies on secondary data and employs linear regression analysis over an eight-year period (2015–2022). Findings indicate that digital fraud has a significant effect on banks’ profitability, with Automated Teller Machines (ATMs) being the most commonly exploited channel. The study recommends that regulatory authorities and relevant stakeholders should intensify efforts to educate and sensitize bank customers on safe practices when using digital banking platforms.