The Nigerian Financial Intelligence Unit (NFIU) has disclosed new tactics allegedly being used by terrorist financiers to hide the identities of individuals controlling illicit funds, including the use of pre-registered SIM cards, accounts linked to deceased persons and bank accounts opened in women’s names.
The disclosure was contained in the NFIU’s 2025 Annual Report, which identified weak customer identification systems, disconnected SIM-Bank Verification Number (BVN) linkages and proxy accounts as emerging vulnerabilities being exploited for financial crimes and terrorist financing.
According to the agency, some terrorist facilitators exploit weaknesses in the connection between mobile phone numbers and financial identities by using SIM cards registered to individuals who have no involvement in the transactions.
The NFIU said the methods include the use of pre-registered SIM cards, SIMs registered to deceased persons and SIMs associated with gender-based proxies to circumvent safeguards linking telephone numbers with BVNs.
The agency explained that the practice makes it difficult for investigators to identify the real individuals controlling illicit funds because numbers used for mobile banking, transaction alerts and other financial services may belong to unrelated persons.
It said the disconnection between the phone number and the actual account controller can effectively break the trail investigators rely on when tracing suspicious transactions, allowing the real facilitators to remain concealed.
Proxy accounts
The NFIU also identified proxy bank accounts as another method used to distance terrorist financiers from illicit financial activities.
According to the report, some accounts are opened in the names of women but are allegedly controlled by male commanders, logistics managers or other operatives who use them to receive and transfer funds.
The agency said terrorist financiers may take advantage of social and cultural perceptions that women are less likely to attract suspicion, using wives, sisters and female associates as fronts for financial transactions.
The NFIU described the practice as “identity laundering”, explaining that the accounts may effectively be controlled by individuals who possess the ATM cards, mobile banking credentials and PINs linked to them.
It noted that in some cases, the women whose names appear on the accounts may have little or no knowledge of the transactions being conducted or the amounts involved.
According to the agency, the arrangement creates an additional layer between the actual operators and the accounts through which illicit funds move, making it harder for authorities to determine the ultimate beneficiaries.
The NFIU consequently identified weak customer identification measures, broken SIM-BVN connections and inadequate monitoring of some digital financial services among the major emerging vulnerabilities recorded in 2025.
Regulators strengthen digital identity controls
The findings come as Nigerian regulators and identity-management agencies intensify efforts to strengthen the connection between citizens’ digital identities, telephone numbers and financial accounts.
In July 2025, the National Identity Management Commission (NIMC) announced that telecommunications operators had migrated to its NINAuth platform, designed to improve NIN verification and strengthen the country’s digital identity infrastructure.
The Central Bank of Nigeria (CBN) subsequently directed banks and other financial institutions in January 2026 to enhance measures against emerging electronic fraud threats, including SIM-swap attacks, social engineering and insider compromise.
The apex bank emphasised the importance of effective Know Your Customer (KYC) and Know Your Device (KYD) procedures, alongside real-time checks against NIN and BVN databases.
In March 2026, the CBN introduced further security requirements for mobile banking and digital payment services, including real-time verification of online account openings and account reactivations against BVN and NIN records.
Financial institutions were also required to deploy systems capable of identifying and monitoring suspicious transactions in real time.
SEC orders capital market operators to monitor terrorism financing
The measures form part of wider efforts to strengthen Nigeria’s financial intelligence and sanctions-monitoring systems.
On August 12, 2026, the Securities and Exchange Commission (SEC) directed regulated capital market operators to subscribe to the Nigeria Sanctions (NigSac) Alerts system.
The platform provides notifications concerning individuals and organisations designated for terrorism financing and proliferation financing.
The SEC instructed market operators to immediately freeze funds and other economic resources belonging to designated persons or entities, notify the Nigeria Sanctions Committee and submit suspicious transaction reports to the NFIU.
The NFIU said the increasing use of technology-driven financial channels, identity proxies and weaknesses in digital identity verification highlights the need for stronger safeguards across Nigeria’s financial system.
It stressed that closing gaps between mobile identities, BVNs, NINs and account ownership is essential to improving the capacity of financial institutions and law enforcement agencies to trace, disrupt and prevent illicit financial flows.
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