CBN has warned Banks and Fintechs, revealing that cyber risks could trigger system-wide financial crisis.
NewsOnline Nigeria reports that the Central Bank of Nigeria (CBN) has warned banks, fintech companies and other financial institutions that cybersecurity and third-party technology risks should be treated as critical financial stability issues, cautioning that vulnerabilities in one institution could spread rapidly across the interconnected financial system.
The Director, Payments System Supervision at the CBN and Chairperson of the Nigeria Electronic Fraud Forum (NeFF), Dr Rakiya Yusuf, gave the warning at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
Yusuf spoke during a session titled, “Navigating Cyber and Systemic Risks in the AI-Driven Future of Banking: Implications for Financial Stability and Business Resilience.”
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She said the increasing dependence of financial institutions on fintechs, payment service providers, cloud operators and other technology vendors had created additional channels through which cyber threats and operational disruptions could spread.
According to her, a weakness in a bank, fintech, payment service provider or technology vendor could quickly affect other interconnected institutions, producing what she described as a “one-fire” effect capable of destabilising the wider financial system.
She therefore urged financial institutions to look beyond protecting their internal infrastructure and strengthen cybersecurity safeguards across the broader financial ecosystem.
CBN Pushes Third-Party Risk Management
Yusuf advised banks and other financial institutions to continuously assess their technology dependencies, third-party relationships and service providers to understand how a disruption affecting one part of the ecosystem could impact their operations.
She stressed that operational resilience goes beyond preventing cyberattacks, noting that financial institutions must also be capable of maintaining critical services during disruptions and recovering quickly after incidents.
The CBN director disclosed that the apex bank was strengthening its regulatory framework, supervisory processes and policy measures to identify and address vulnerabilities capable of threatening financial stability before they materialise.
According to her, cyber and operational risk considerations are now being integrated into the product approval process to ensure that new financial products do not introduce vulnerabilities that could have systemic consequences.
She also urged financial institutions to extend cybersecurity and risk-management oversight to third-party service providers.
Banks, she said, should assess the ability of their technology partners to withstand cyberattacks and recover from major operational failures.
CBN Seeks Faster Cyber Incident Reporting
Yusuf called for prompt reporting of cyber incidents and vulnerabilities to regulators, stressing that early disclosure would allow authorities to intervene before isolated breaches escalate into systemic threats.
She also advocated greater intelligence and information sharing among financial institutions, saying stronger collaboration would improve the industry’s ability to detect emerging threats and coordinate responses.
The CBN director recommended stronger Security Operations Centres (SOCs) capable of monitoring cyber threats across the financial ecosystem in real time.
AI Adoption Must Come With Accountability
On the growing adoption of artificial intelligence in financial services, Yusuf cautioned that technological innovation must be matched with accountability.
She stressed that increased automation should not remove human responsibility from financial decisions, particularly those affecting customers and the stability of the financial system.
She described the approach as “automating accountability,” explaining that while AI could perform increasingly sophisticated tasks, human oversight must remain central to critical decisions.
Yusuf also urged financial institutions to strengthen data governance and pay greater attention to digital sovereignty.
She said institutions should understand where critical data are stored, who has access to them, what intelligence can be derived from the data and how such information influences decision-making.
She warned that placing critical data or key technological capabilities beyond an institution’s effective control could expose the financial system to additional risks.
CBN Calls for Collective Approach to Cybersecurity
Yusuf maintained that protecting Nigeria’s financial system requires a collective approach involving regulators, banks, fintechs, payment service providers and technology companies.
She said the objective should be to build a resilient financial ecosystem capable of absorbing shocks, containing cyber incidents and recovering swiftly without allowing the failure or compromise of one institution to threaten the stability of the wider financial system.
