The Director-General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa, has urged the Central Bank of Nigeria (CBN) to extend its oversight coverage of financial institutions to cloud providers, telecom networks, fintechs and other technology partners in order to protect customers and other stakeholders from the associated risks of digital payment ecosystem.
Inuwa, who made the call in his address on digital transformation, supervision, innovation and operational resilience at the recent 15th Retreat of the CBN Committee of Departmental Directors in Lagos, maintained that traditional regulatory approaches were no longer sufficient for a financial system in which banks increasingly rely on technology providers and interconnected digital infrastructure.
Warning that an outage or disruption at an external provider could spread across the wider financial ecosystem, the techno expert pointed out that “financial stability now depends on resilient technology and Nigeria’s capacity for digital self-determination.”
The NITDA boss harped on the need for regulators to move beyond monitoring individual financial institutions and develop visibility across the ecosystem that supports modern banking, arguing that disruptions outside a bank can have consequences for customers and the broader financial system even when the bank itself remains operational.
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Inuwa explained: “We need to be ahead of the institutions we regulate. We cannot wait for regulated institutions to submit returns before we analyse and understand what is happening. We need end-to-end visibility of the ecosystem.”
The Director-General said the next stage of regulation should go further by incorporating risks arising from technology suppliers, including so-called third-party and fourth-party dependencies, cloud infrastructure, data protection, artificial intelligence and the sustainability of digital infrastructure.
As cloud computing is becoming a particularly important part of the digital payment ecosystem determining factors, the NITDA had early this month signed regulatory instruments establishing a framework for cloud computing and digital infrastructure, as well as a National Cloud Investment Strategy aimed at strengthening Nigeria’s domestic cloud and data-centre capacity.
To ensure successful implementation of the strategy, the agency plans to begin registration, technical assessment and certification of cloud and digital infrastructure providers through a national digital regulatory platform in October.
Inuwa said operational resilience had to extend beyond conventional cybersecurity measures, arguing that regulators need to consider the possibility that a failure in connectivity, cloud services or a digital platform could affect multiple institutions simultaneously, cautioning that artificial intelligence is creating a new layer of risk because the technology is increasingly being used both to strengthen cyber defences and to attack digital systems.
Noting that AI systems have becoming targets for sophisticated attacks, Inuwa urged institutions and agencies to develop the capacity to use artificial intelligence defensively while protecting AI-powered systems from manipulation and compromise.
This is even as he said that digital sovereignty should be treated as part of financial stability, saying Nigeria cannot guarantee the resilience of critical financial services without having meaningful control over the infrastructure supporting them.
The inudtry expert quipped: “If we do not build, control and maintain sovereignty over critical digital infrastructure, how can we guarantee the stability and integrity of our financial system?”
The NITDA boss’ call aligns with the recent CBN’s broader efforts to strengthen the banking system, modernise payments, improve financial inclusion and encourage responsible fintech innovation.
The monetary regulatory institution has described institutional capacity, stronger financial-system infrastructure and modernised payment systems as important elements of its reform agenda.
Over the past few years, the apex bank been strengthening technology-related safeguards, including a directive requiring payment acquirers, processors and terminal service providers to maintain dual connections to NIBSS and Unified Payment Services to reduce disruption caused by dependence on a single transaction channel.
Similarly, the CBN has also been intensifying its regulatory drive in the financial system towards greater use of automated technology in financial supervision.
For instance, last March it issued a baseline standards for automated anti-money laundering, counter-terrorism financing and counter-proliferation financing systems that require real-time detection, analysis and reporting of suspicious transactions.
