The Central Bank of Nigeria (CBN) has hinted that it is working on the modalities for new regulations to address the menace of cybercrimes and technology threats in the nation’s financial system in view of the risks to the banking sector stability.
The apex bank pointed out that the need for robust monetary regulations that will address cyber crimes and technological risks that may arise from emerging modern financial technology companies (fintechs) had become imperative in the country.
The Deputy Governor, CBN, Mrs. Aisha Ahmad, disclosed the proposed regulatory measure at a seminar organized by Risk Managers Association of Nigeria (RIMAN) in collaboration with Chartered Institute of Bankers of Nigeria (CIBN), in Lagos.
Represented by the Executive Director, Banking Supervision Department, CBN, Mr. Christian Okoye, at the forum, the Deputy Governor pointed out that there was a compelling need to redesign regulations that will address risk that may emanate from the new emerging and increasing modern class of financial firms.
She expatiated: “The outlook of risk functions in banks and financial services firms would be fundamentally different on what they are today and at such calls for timely actions to guide against banks being overwhelmed by the new requirements.
“This is consequent upon the modern technology which has ushered in complex security challenges, cybercrimes and varying other forms of risks. For instance, the emergence of new competitors.
“With the emergence of new competitors there will be increased customer expectations which will cause massive alterations in banking as the future of banking is entirely encapsulated in technology mostly offered by financial technology firms (FinTechs)”, Ahmad stressed.
According to her, apart from the emergence of new competitors intensely exploring technologies, competitive mobile apps, online services, interconnected networking and unregulated virtual currencies have led to a rise in the global cybercrimes rate.
The banker noted further that the range of highly competitive mobile apps and online services offered by local and international fintech firms, makes it incredibly simple for customers to execute the entire banking transactions without going through banks thus making it difficult for banks to have a full view of a customer transaction and thereby maintain customer relationships.
Ahmad explained that this form of open banking was capable of marking or will make Nigerian banks susceptible to money laundering, terrorist financing risks since all these transactions still pass through their networks to malicious beneficiaries which will have a damaging effect on our nations’ reputation.
She restated the apex bank’s readiness to react proactively to these risky developments by providing appropriate regulations that will enable the banks and financial system stakeholders to manage the risks and prevent losses in the financial system to fraudsters.
