The Central Bank of Nigeria, CBN, has been advised to widen its regulatory oversight to include risks linked to cloud service providers, telecommunications networks, fintech companies and other technology partners serving the financial sector.
The Director-General of the National Information Technology Development Agency, NITDA, Kashifu Inuwa, gave the advice at the 15th Retreat of the CBN Committee of Departmental Directors in Lagos.
Inuwa said the growing dependence of banks and payment companies on external technology providers means traditional regulatory methods are no longer sufficient.
He warned that a disruption affecting a cloud provider, telecom network or other critical technology partner could spread across several financial institutions and affect the wider economy.
According to him, financial stability increasingly depends on resilient technology infrastructure and Nigeria’s ability to maintain control over critical digital systems.
Inuwa urged regulators to move beyond monitoring individual banks and develop a broader understanding of the technology ecosystem supporting financial services.
He said regulators should not wait for financial institutions to submit returns before identifying emerging risks, but should have end-to-end visibility of the systems and providers involved.
Third-Party Technology Risks
The NITDA boss said regulation should increasingly cover third-party and fourth-party dependencies, cloud infrastructure, data protection, artificial intelligence and the sustainability of digital infrastructure.
He explained that a bank could outsource a critical service to a technology provider, which may itself depend on another company for infrastructure. Such interconnected arrangements, he said, could make it difficult to determine the source of a disruption.
The CBN has already introduced measures to strengthen the resilience of the financial system.
These include a directive requiring payment acquirers, processors and terminal service providers to maintain dual connections to the Nigeria Inter-Bank Settlement System, NIBSS, and Unified Payment Services, reducing dependence on a single transaction channel.
The apex bank has also increased its use of automated technology for financial supervision, including baseline standards issued in March for automated anti-money laundering, counter-terrorism financing and counter-proliferation financing systems.
The standards require real-time identification, analysis and reporting of suspicious transactions.
Cloud Infrastructure Comes Under Focus
Cloud computing is also becoming a major regulatory concern as banks and payment companies increasingly depend on digital infrastructure provided by external firms.
Earlier in August, NITDA signed regulatory instruments establishing a framework for cloud computing and digital infrastructure, alongside a National Cloud Investment Strategy designed to strengthen Nigeria’s domestic cloud and data-centre capacity.
NITDA is expected to commence the registration, technical assessment and certification of cloud and digital infrastructure providers through a national digital regulatory platform in October.
Inuwa said operational resilience must go beyond conventional cybersecurity measures because failures involving connectivity, cloud services or digital platforms could potentially affect multiple financial institutions at the same time.
AI Creates New Layer of Risk
The NITDA director-general also highlighted the growing risks associated with artificial intelligence.
He said AI is being deployed to strengthen cyber defences but is also being used in increasingly sophisticated attacks against digital systems.
Inuwa urged financial institutions to build the capacity to use AI defensively while ensuring that AI-powered systems are protected from manipulation and compromise.
He also argued that digital sovereignty should form part of Nigeria’s financial stability strategy.
According to him, the country cannot guarantee the resilience and integrity of critical financial services without having meaningful control over the infrastructure that supports them.
CBN Reforms Continue
The call for broader technology oversight comes amid ongoing reforms by the CBN under Governor Olayemi Cardoso to strengthen the banking sector, modernise payment systems, promote financial inclusion and support responsible fintech innovation.
Speaking virtually at the retreat, Cardoso said the bank’s reforms were designed to become embedded in its systems, processes and institutional culture rather than depend on individual leaders.
He also assured CBN employees that the institution was in a strong position, saying the reforms should reinforce the bank’s professional career structure.
The Chairman of the CBN Committee of Departmental Directors, Jimoh Musa Itoba, described departmental directors as key pillars of the institution and urged them to use the retreat to develop practical measures for strengthening financial stability and economic growth.
Inuwa said the future of financial supervision should involve more than simply digitising regulation. He argued that regulators must transform how they identify, understand and respond to risks across the entire financial technology ecosystem.
This, he said, would require monitoring not only banks and their financial activities but also the technology infrastructure, service providers and interconnected platforms on which the financial system increasingly relies.
