Nigerians have lost an estimated N12.5 billion to telecom-related fraud in recent years as cyber criminals increasingly deploy sophisticated digital tools to exploit weaknesses in the country’s telecommunications and financial ecosystems.
This is according to a new industry report by PricewaterhouseCoopers titled: “AI’s Dual Role in Telecom Fraud”. The report examines the growing role of artificial intelligence in telecom fraud, which warns that emerging technologies are enabling criminals to execute scams more efficiently and on a much larger scale.
The report notes that as Nigeria’s digital economy expands, telecom networks have become central infrastructure for banking transactions, online payments and digital identity verification.
This development has also expanded the opportunities available to fraudsters who target communication channels used for financial authentication.
Data from the Nigerian Communications Commission (NCC), quoted in the report, indicates that Nigerians lost about N12.5 billion to telecom-related financial crimes between 2019 and January 2023.
Industry experts say the increasing integration of telecommunications services with fintech platforms and digital banking systems has created new vulnerabilities within the ecosystem.
AI transforming telecom fraud
Artificial intelligence is now emerging as a major factor reshaping the telecom fraud landscape.
According to PwC, criminals are increasingly using AI-powered tools to automate scams, personalise phishing messages and mimic legitimate communications from trusted institutions.
“Unlike traditional scam messages that were often poorly written and easy to identify, generative AI can produce convincing messages that closely resemble official communications from banks, telecom companies or government agencies.
“These tools allow fraudsters to generate thousands of targeted messages within minutes, dramatically increasing the scale of potential attacks.”
The report also notes that AI technologies are being used to refine long-standing telecom fraud techniques such as SIM swap attacks and SMS phishing.
In SIM swap fraud, criminals obtain personal information belonging to a victim and convince telecom operators to transfer the victim’s phone number to a new SIM card under the fraudster’s control.
Once the number is hijacked, the attacker can intercept one-time passwords and security alerts used to access banking platforms and digital wallets.
Global telecom fraud losses
The rise of AI-driven scams comes at a time when telecom fraud is already costing the industry billions of dollars worldwide.
In a more whooping trend, the report estimates that global telecom fraud losses reached about $38.95 billion in 2023, highlighting the scale of the challenge facing operators and regulators.
The findings are consistent with insights from the Global Economic Crime Survey conducted by PwC, which found that nearly two thirds of technology, media and telecommunications companies have experienced some form of fraud.
A significant proportion of these incidents were cyber-enabled, reflecting the growing role of digital technologies in modern financial crime.
Rising exposure among Nigerian users
The report also highlights growing exposure to scams among Nigerian digital banking users.
Studies referenced in the report indicate that about 59 per cent of e-banking users in Nigeria have encountered scam attempts at some point while using digital financial services.
Experts say this trend underscores the need for stronger consumer awareness and more advanced fraud prevention systems within telecom networks.
Industry response
Telecommunications operators are increasingly turning to artificial intelligence to strengthen fraud detection systems and improve network monitoring.
Accordingly, AI-powered analytics tools are being leveraged to analyse large volumes of call records, messaging traffic and network data to identify suspicious patterns that may indicate fraudulent activity.
Such systems, the report says, allow operators to detect abnormal calling behaviour, unusual traffic patterns and suspicious account activities in real time.
Industry stakeholders say stronger collaboration between telecom operators, financial institutions and regulators will be critical in addressing the growing threat.
