CBN Governor, Yemi Cardoso
Central Bank of Nigeria (CBN) has warned banks, fintech companies and other financial institutions about growing cybersecurity and third-party technology risks arising from the increasing interconnectivity of the financial system.
The Director, Payments System Supervision Department of the CBN and Chairperson of the Nigeria Electronic Fraud Forum, Dr Rakiya Opemi Yusuf, gave the warning on Wednesday September 9 at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria in Abuja.
The apex bank cautioned that a vulnerability in one financial institution or technology provider could spread across interconnected platforms and cause wider disruptions in the financial ecosystem.
Speaking during a panel session on “Navigating Cyber and Systemic Risks in the AI-Driven Future of Banking: Implications for Financial Stability and Business Resilience,” Yusuf said the growing use of artificial intelligence, fintech services and digital platforms had introduced new risks to financial stability.
According to her, the increasing reliance of financial institutions on fintechs, payment service providers, cloud operators and other technology vendors had created additional channels through which cyber incidents could spread.
Yusuf described the potential impact as a “one-fire” effect, where a weakness in one bank, fintech, payment service provider or technology vendor could affect other interconnected institutions and disrupt the wider financial system.
She urged financial institutions to regularly assess their technology dependencies and third-party relationships to determine how the failure of a service provider could affect their operations.
The CBN director stressed that resilience should go beyond preventing cyberattacks, saying institutions must also be able to maintain critical services during disruptions and recover quickly after an incident.
She said the CBN was strengthening its policies, regulations and supervisory frameworks to ensure that vulnerabilities capable of threatening financial stability were identified and addressed before they became systemic problems.
Yusuf added that systemic risk considerations were now being taken into account in the approval of new financial products.
She urged banks and other financial institutions to extend their cybersecurity and risk-management measures to third-party providers on which their operations depend.
The CBN official advised institutions to assess the ability of their technology partners to withstand and recover from cyberattacks and major operational failures.
She also called for prompt reporting of cyber incidents and vulnerabilities, saying early disclosure would enable regulators to intervene before isolated incidents developed into broader threats to financial stability.
Yusuf further stressed the need for stronger information and intelligence sharing among financial institutions to improve the industry’s ability to identify emerging threats and coordinate responses. She advocated stronger Security Operations Centres capable of monitoring threats across the financial ecosystem in real time.
On the growing use of artificial intelligence and automation, Yusuf urged financial institutions to balance innovation with accountability, stressing that automation should not eliminate human responsibility from financial decisions and processes.
She also called for stronger data governance and greater attention to digital sovereignty, urging institutions to know where critical data is stored, who has access to it, what insights can be derived from it and how the information is used in decision-making.
Yusuf warned that placing critical data or technological capabilities beyond an institution’s effective control could expose the financial system to additional risks.
She said the ultimate objective should be to build a financial ecosystem capable of absorbing shocks, containing cyber incidents and recovering quickly without allowing the failure of a single institution or technology provider to destabilise the wider system.
