CBN To Check Cyber Crimes, Tech Risks
BY CHINYERE OBIORA, LAGOS – The Central Bank of Nigeria (CBN) says tough times await those that are exposing the nation’s financial sector to cyber-crime and technology risks for their selfish interests and personal gains.
Accordingly, the apex bank has given assurances that new regulations will soon come on board to sanitise and insulate the sector from risks associated with cyber-crime, technology-related risks and infringements within the financial system.
Speaking through its Deputy Governor, Mrs Aishah Ahmad, the CBN said no efforts would be spared in redesigning existing regulations as well as introducing new ones to tackle cyber crimes and technological risks arising from emerging modern financial organizations across the country.
Mrs Ahmad, who spoke at a seminar organized by Risk Managers Association of Nigeria (RIMAN) in partnership with Chartered Institute of Bankers of Nigeria (CIBN), in Lagos said; “There is compelling need to redesign regulations that will address risk that may emanate from the new emerging and increasing modern class of financial firms.”
She expressed concerns over the growing losses from cybercrime and technology risk in the sector, noting that; “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.”
Represented by the Executive Director, Banking Supervision Department, CBN, Mr Christian Okoye, the Deputy Governor said modern technology has ushered in complex security challenges, cybercrimes and varying other forms of risks, adding that with new competitors coming on the scene, customers would also up their expectations from financial operators.
“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 stated.
She said aside the emergence of new competitors intensely exploring technologies, competitive mobile apps, online services, interconnected networking and unregulated virtual currencies have also led to an increase in the global cause of cyber-crime.
The CBN Deputy Governor admitted that the range of highly competitive mobile apps and online services offered by local and international fintech firms has made it simple for customers to execute banking transactions without going through banks, thus making it difficult for banks to have full view of customers’ transaction and maintain personal customer relationships.
“This form of open banking makes or will make our 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.
“Furthermore unregulated virtual or digital currencies open doors for criminals to unanimously conduct illegal activities online while limiting the ability to track movement of such frauds. The banks are also faced with cyber attacks following today’s interconnected networking which does not simply stand at one location and end at the other rather it is borderless in so much access methods”, she said
For Mrs Ahmed, the developments have resulted in considerable increase in the global cost of cybercrime, adding that though diverse organizations are exposed to cybercrime, the financial sector is mostly at risk due to its vital role in financial intermediation in a well connected global financial system.
In his remarks, RIMAN President, Mr Magnus Nnoka said now in its sixth year, the seminar titled: “The future of risk management in Nigeria” is value added to Nigeria’s financial sector efficiency and safety.
Nnoka said; “What we are seeing today is a projection of what has been going on in the past five to six years because this idea has gone through three presidents both from RIMAN side and the CIBN side.”
