The Central Bank of Nigeria has warned banks, fintech companies and other financial institutions against growing cybersecurity and third-party technology risks, saying the increasing interconnection of the financial system means that a weakness in one institution or service provider could trigger wider disruption across the sector.
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The Director of the Payments System Supervision Department of the CBN and Chairperson of the Nigeria Electronic Fraud Forum, Dr Rakiya Opemi Yusuf, gave 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 theme, “Navigating Cyber and Systemic Risks in the AI-Driven Future of Banking: Implications for Financial Stability and Business Resilience,” Yusuf said the financial sector’s growing dependence on fintechs, payment service providers, cloud operators and other technology vendors had created new channels through which cyber incidents could spread.
She warned that a vulnerability in one bank, fintech, payment provider or technology company could affect several interconnected institutions, creating what she described as a “one-fire” effect capable of threatening the wider financial system.
According to her, financial institutions must therefore look beyond their internal systems and assess the strength of the third-party providers and technology partners on which they depend.
Yusuf said institutions should regularly review their dependencies, technology vendors and external relationships to understand how the failure of one service provider could affect their operations.
She stressed that resilience should not be limited to preventing attacks, but should also include the capacity to continue providing critical services during disruptions and to recover quickly when an incident occurs.
The CBN director said the apex bank was strengthening its policies, supervisory frameworks and regulatory measures to ensure that vulnerabilities capable of threatening financial stability were identified and addressed before they developed into wider systemic problems.
She added that systemic risk considerations were increasingly being factored into the product approval process.
Yusuf also urged banks and other financial institutions to extend their cybersecurity and risk-management responsibilities to third-party providers, including assessing whether such partners have the capacity to withstand and recover from cyberattacks or major operational failures.
She called for prompt reporting of cyber incidents and vulnerabilities, saying early disclosure would enable regulators and other institutions to respond before isolated incidents spread across the financial system.
The CBN official further stressed the importance of information and intelligence sharing among financial institutions, saying collective awareness of emerging threats would improve the industry’s ability to prevent and contain attacks.
She also 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 in banking, Yusuf urged institutions to balance innovation with accountability, warning that increased automation should not remove human responsibility from financial decisions and operational processes.
She 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 information can be generated from it and how such data influences decision-making.
According to her, placing sensitive data or critical technological capabilities beyond an institution’s effective control could expose both the organisation and the wider financial system to additional risks.
Yusuf said the ultimate objective should be the creation of a financial ecosystem capable of absorbing shocks, containing cyber incidents and recovering rapidly without allowing the failure of a single bank, fintech or technology provider to destabilise the entire system.
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