…says one incident could disrupt the entire financial system
The Central Bank of Nigeria (CBN) has warned banks, fintechs and other financial institutions against the growing cybersecurity and third-party technology risks associated with the increasing interconnectivity of the financial system.
…says one incident could disrupt the entire financial systemREAD ALSO: The National Library issues 89,195 ISBNs and registers 272,172 users in five years – Anunobi
The top bank warned that a vulnerability in one institution or technology provider could trigger broader disruptions across the financial ecosystem, and urged financial institutions to strengthen safeguards beyond their individual organizations.
The CBN said the increasing reliance on fintechs, payment service providers, cloud operators and other technology providers had created additional channels through which cyber incidents could spread throughout the financial system.
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The Director of the CBN Payment Systems Supervision Department and Chairman of the Nigerian Electronic Fraud Forum, Dr. Rakiya Opemi Yusuf, made the warning on Wednesday during a panel session at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria in Abuja.
Speaking on the topic “Navigating Cyber and Systemic Risks in the AI-Driven Future of Banking: Implications for Financial Stability and Business Resilience”, Yusuf highlighted the implications of artificial intelligence, cyber threats and digital interconnectivity for Nigeria’s financial stability.
He warned that a weakness in one bank, fintech, payment services provider or technology provider could spread to other interconnected institutions, creating what he described as a “one-off” effect capable of disrupting the broader financial system.
Yusuf said financial institutions should periodically evaluate their dependencies, relationships with third parties and technology providers to understand how a failure in one part of the ecosystem could affect their operations.
He said resilience should not be limited to preventing cyber incidents, but should also include the ability of institutions to continue providing critical services during disruptions and recover quickly after an incident.
The CBN chief said the apex bank was strengthening its policies, regulations, supervisory frameworks and other measures to ensure that vulnerabilities capable of threatening financial stability were identified and addressed before they crystallized.
He added that systemic risk considerations were also being taken into account during the product approval process.
Yusuf urged financial institutions to extend their cybersecurity and risk management responsibilities to third-party providers on whom their operations increasingly depend.
He advised banks and other institutions to critically assess the resilience of their technology partners, including their ability to withstand and recover from cyberattacks and major operational failures.
The CBN chief also called for prompt reporting of cyber incidents and vulnerabilities, noting that timely disclosure would allow regulators to intervene before isolated incidents turn into broader systemic threats.
He highlighted the importance of information and intelligence sharing between financial institutions and said greater collaboration would allow the industry to identify emerging threats and strengthen its collective response.
Yusuf further advocated for stronger security operations centers capable of monitoring threats across the financial ecosystem in real time.
He urged financial institutions to strike a balance between innovation and responsibility, and emphasized that greater automation should not eliminate human responsibility from financial decisions and processes.
The CBN chief also called for stronger data governance and greater attention to digital sovereignty, urging institutions to examine where critical data is stored, who has access to it, what insights can be generated from it, and how such data influences decision-making.
It warned that placing critical data or technological capabilities beyond an institution’s effective control could expose it to additional risks.
Yusuf said the ultimate goal should be to build a financial ecosystem capable of absorbing crises, containing cyber incidents and recovering quickly without allowing the failure of a single institution or service provider to destabilize the overall system..
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