As fintech continues to revolutionalise financial services in Nigeria, the Central Bank of Nigeria (CBN) and the Chartered Institute of Bankers of Nigeria (CIBN) have advised risk managers to stay ahead of trends and step up their risk management mechanisms to avert imminent risks that may arise from modern technology.
Speaking at the Risk Management association of Nigeria (RIMAN) mandatory seminar for certified risk managers, in Lagos at the weekend, the Deputy Governor CBN, Mrs Aishah Ahmad argued that risk functions of banks must be in line with latest information and ‘up to date’ to address new and emerging risks from technology.
While delivering her paper titled ‘Regulatory perspective on the future of risk management in Nigeria’ Ahmad, who was represented by the Director, Banking Supervision, CBN Christian Okoye at the occasion said: “The outlook of risk functions in banks and financial services firms would be fundamentally different from where they are today and as such, calls for timely action to guide against banks being overwhelmed by the new requirements.
“This is consequent upon the new technology that ushered in complex security challenges, cybercrime and various other forms of risks.
For instance, the emergence of new competitors, there would be increased customer expectations which would cause massive alteration in banking as the future of banking is entirely encapsulated in technology mostly offered by Fintechs.”
According to her, while a variety of organisations are exposed to cybercrimes, the financial sector is particularly vulnerable given its crucial role of financial intermediation.
She admitted that fintech firms are profoundly revolutionising the way financial services are provided, but however noted that fintech firms also present new and arguably severe concerns to conventional financial institutions given their small size and business model.
Furthermore, she added that the absence of reliable information about these conventional financial institution structures makes it difficult to monitor their operations and thereby exposing them to economic shocks.