The Nigerian Financial Intelligence Unit (NFIU) has raised the alarm over emerging methods being used by terrorist financiers to conceal the identities of individuals controlling illicit funds, including the use of pre-registered SIM cards and bank accounts opened in women’s names.

The disclosure was contained in the NFIU’s 2025 Annual Report, which identified disconnected SIM-Bank Verification Number (BVN) linkages, proxy accounts and weak customer identification controls as emerging enablers of financial crime and terrorist financing.

According to the report, terrorist facilitators exploit gaps in the linkage between mobile phone numbers and financial identities by using SIM cards that are not registered to the actual users of bank accounts.

The agency said some facilitators use pre-registered SIM cards, SIMs registered to deceased persons and SIMs linked to gender-based proxies to circumvent the security mechanisms connecting SIM cards with BVNs.

It explained that the practice allows individuals controlling illicit funds to remain hidden because phone numbers used for mobile banking, transaction notifications and account alerts may be registered to people who have no connection with the underlying transactions.

“They bypass the security link between SIM cards and Bank Verification Numbers (BVNs) by using pre-registered SIMs, SIMs registered to deceased people, or SIMs tied to gender-based proxies,” the report said.

The NFIU said the arrangement creates significant difficulties for financial intelligence and law enforcement investigators seeking to establish the identity of individuals behind suspicious transactions.

“This severs the audit trail: when a transaction is flagged, investigators trace the phone to an unrelated person, letting the real facilitator stay anonymous and continue operations,” the agency added.

Proxy accounts

The NFIU also identified proxy bank accounts as another method used by terrorist financiers to distance themselves from illicit funds.

According to the agency, accounts are sometimes opened in the names of women while male commanders, logistics managers or other operatives secretly control the accounts and use them to move funds.

The report said terrorist financiers exploit social and cultural expectations that may make women less likely to attract suspicion from authorities, using wives, sisters and female associates as fronts for financial transactions.

The agency described the practice as “identity laundering”, noting that the accounts may be controlled by men who possess the ATM cards, mobile banking credentials and personal identification numbers associated with the accounts.

“This tactic functions as identity laundering: women’s accounts are managed by men who hold ATM cards, mobile-banking credentials, and PINs, while the women often remain unaware of the transactions and volumes,” the report said.

The NFIU said the arrangement creates a layer of separation between the actual operators and the accounts through which illicit funds are transferred, making it more difficult to identify the ultimate beneficiaries of the transactions.

The agency consequently listed weak customer identification controls, disconnected SIM-BVN linkages and limited oversight of certain digital financial services among the emerging enablers of financial crime recorded in 2025.

Regulators tighten digital identity controls

The NFIU’s findings come amid increased efforts by Nigerian regulators and identity-management authorities to strengthen the links between digital identities, mobile telephone numbers and financial accounts.

In July 2025, the National Identity Management Commission (NIMC) announced that all telecommunications operators had migrated to its NINAuth platform, a system designed to strengthen National Identification Number (NIN) verification and improve the security of Nigeria’s digital identity ecosystem.

In January 2026, the Central Bank of Nigeria (CBN) also directed banks and other financial institutions to strengthen their responses to emerging electronic fraud threats, including SIM-swap attacks, social engineering and insider compromise.

The apex bank stressed the importance of effective Know Your Customer (KYC) and Know Your Device (KYD) processes, supported by real-time validation against NIN and BVN databases.

In March 2026, the CBN introduced additional security requirements for mobile banking and digital payment services, including real-time validation of online account openings and account reactivations against BVN and NIN databases.

The requirements also mandate financial institutions to deploy fraud-monitoring systems capable of detecting suspicious transactions in real time.

SEC orders capital market operators to monitor terrorism financing

The measures coincide with broader efforts to strengthen Nigeria’s financial intelligence and sanctions-monitoring framework.

On August 12, 2026, the Securities and Exchange Commission (SEC) directed all capital market-regulated entities to subscribe to the Nigeria Sanctions (NigSac) Alerts system.

The system provides alerts on individuals and entities designated for terrorism financing and proliferation financing.

The SEC directed market operators to immediately freeze funds and other economic resources belonging to designated individuals and entities, report such actions to the Nigeria Sanctions Committee and file suspicious transaction reports with the NFIU.

The NFIU said the growing use of technology-enabled channels, identity proxies and gaps in digital identity verification underscores the need for stronger controls across Nigeria’s financial system.

It noted that closing the gaps between mobile identities, BVNs, NINs and account ownership remains critical to improving the ability of financial institutions and law enforcement agencies to trace and disrupt illicit financial flows. (The Guardian)

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