CBN warns banks, fintechs over cyber risks, flags "one-fire" threat to financial stability

The Central Bank of Nigeria has warned banks, fintech companies and other financial institutions that cybersecurity and technology risks could threaten Nigeria's financial stability. The regulator says weaknesses in one institution can spread across the wider financial system.

Dr Rakiya Yusuf, Director of Payments System Supervision at the CBN and Chairperson of the Nigeria Electronic Fraud Forum, gave the warning at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria in Abuja.

Technology partners in the spotlight

Yusuf spoke on "Navigating Cyber and Systemic Risks in the AI-Driven Future of Banking: Implications for Financial Stability and Business Resilience." She said the sector's growing reliance on fintechs, payment providers, cloud services and other technology companies has created new risks.

A cyberattack or major disruption affecting one institution could spread to others because of the close links within the financial system. She described the possible chain reaction as a "one-fire" effect.

Yusuf urged financial institutions to assess not only their own systems but also the risks posed by their technology partners. Banks should regularly review third-party providers and ensure they can withstand and recover from cyberattacks or major disruptions.

According to her, resilience means being able to keep essential services running during an incident and restore operations quickly when problems occur.

Regulator tightens oversight

Yusuf disclosed that the CBN is strengthening its regulatory and supervisory measures to identify risks before they threaten financial stability. Cybersecurity considerations are also being included in the approval of new financial products.

She called for prompt reporting of cyber incidents to regulators, saying early warnings would help prevent individual breaches from becoming wider threats. She also encouraged greater information sharing among financial institutions and stronger monitoring of cyber threats.

On artificial intelligence, Yusuf said the adoption of new technology must be accompanied by accountability. She stressed that human oversight should remain important when AI is used for decisions affecting customers and financial institutions.

She also urged financial institutions to improve how they protect and manage sensitive data, including knowing where important information is stored and who can access it.

Yusuf said protecting Nigeria's financial system required cooperation among regulators, banks, fintechs, payment providers and technology companies. She added that the industry must work towards a stronger financial ecosystem that can withstand cyber incidents, limit their impact and recover quickly.

Why it matters

The warning comes as the CBN pushes banks and fintechs to treat technology risk as a stability issue, not just an IT problem. For customers and businesses, the focus on third-party providers and incident reporting could mean tighter scrutiny of the payment and lending platforms they rely on daily.

Separately, banks filed 38,715 of the 42,082 suspicious transaction reports received by the Nigerian Financial Intelligence Unit in 2025, accounting for about 92 per cent of the total.