CBN is thinking CyberCrime, Moves to Protect Banks

Central Bank of Nigeria (CBN) said that the figures involved in global cybercrimes were ‘quite alarming’ and has plans to protect banks from Internet frauds and other cybercrimes.

Mrs. Olatokunbo Martins, the apex bank’s director, Banking Supervision who stated this also said that each technology adopted by a bank present unique risks that raise safety and soundness concern.

She spoke in a a keynote speech at the first annual Conference on Audit and Regulatory Examination of Banking Technologies recently in Lagos.

“In banks, you employ so many technology-driven products and the banks embrace new financial, operational and compliance risk as you adopt these new technologies.

“As you are aware, very soon, we won’t just be requiring you to make capital charge for your credit, you will also be required to make capital credit for your operational risks. IT risk is a major operational risk.

“Currently, you will say that the major risk comes from credit, but some will also tell you that a significant part of credit risk is operational. If you say that operational risk is a failure of people, processes and system, even the credit risk, a major part of it is interwoven with credit risk.”

Speaking further, Martins added that, the banking industry should be Basel 11 compliant by 2014 and this will bring about enhanced capital bumpers while protecting the banks and making them more resilient.

She said, “Today, information technology has evidently impacted banking tremendously, even redefining the nature of banking and banking relationships. Banks are truly enjoying all the technological novelties with potential for expanding their products, services, customer base and responding to regulation, and above all, improve their profitability.

“However, it is important not to lose sight of the fact that technology comes with great risk. Technology poses risk to the safety and soundness of financial institutions, to the public interest and to the larger economy.” - NCW