Digital stability now key to financial stability, NITDA DG tells CBN Directors

"Financial regulators must move beyond monitoring individual banks and begin supervising the wider digital ecosystem comprising telecommunications networks, cloud platforms, fintech companies, data systems and other technology infrastructure powering modern financial services." Inuwa

The Director-General of the National Information Technology Development Agency, NITDA, Kashifu Inuwa, has warned that traditional regulatory tools are no longer sufficient to guarantee stability in Nigeria’s increasingly digital banking sector.

Inuwa said financial regulators must move beyond monitoring individual banks and begin supervising the wider digital ecosystem comprising telecommunications networks, cloud platforms, fintech companies, data systems and other technology infrastructure powering modern financial services.

The NITDA boss spoke in Lagos while delivering a paper titled, “Digital Transformation, Supervision, Innovation and Operational Resilience,” at the 15th Retreat of the Central Bank of Nigeria Committee of Departmental Directors.

The retreat was themed, “From Reform to Institutionalisation: Strengthening the CBN Capacity to Deliver Sustainable Financial System Stability.”

Inuwa said the rapid transition from branch banking to internet banking, mobile platforms, fintech ecosystems and embedded finance had made many conventional supervisory approaches inadequate.

He stressed that “to achieve financial stability, we need digital stability,” arguing that the two were now inseparable.

According to him, regulators can no longer depend solely on periodic returns from financial institutions but must develop real-time visibility across the entire financial ecosystem.

“We need to be ahead of the institutions we regulate. We cannot wait for regulated institutions to submit returns before we analyse and understand what is happening. We need end-to-end visibility of the ecosystem,” he said.

Inuwa also urged financial regulators to distinguish between digitalisation and digital transformation, noting that while digitalisation improves existing processes with technology, digital transformation creates new operating models and value propositions.

On operational resilience, he said the focus must extend beyond conventional cybersecurity to include third-party and fourth-party risks, cloud governance, data protection, artificial intelligence oversight and the sustainability of critical digital infrastructure.

He identified growing dependence on external technology providers as a major emerging risk, warning that disruptions to cloud services, connectivity networks or digital platforms could have far-reaching consequences for the financial system.

The NITDA DG also raised concerns over AI-driven cyber threats, saying regulators and financial institutions must deploy artificial intelligence to strengthen cyber defence while simultaneously protecting AI-powered systems from manipulation and attacks.

He called for increased investment in local digital talent and institutional capacity, stressing that Nigeria’s ability to supervise a technology-driven financial system would depend largely on the availability of skilled professionals.

Inuwa further linked financial stability to digital sovereignty, arguing that Nigeria must retain meaningful control over the infrastructure powering critical sectors of its economy.

“Financial stability now depends on resilient technology and Nigeria's capacity for digital self-determination. If we do not build, control and maintain sovereignty over critical digital infrastructure, how can we guarantee the stability and integrity of our financial system?” he asked.

He urged policymakers to adopt a system-wide approach to supervision, saying the future of regulation lies not merely in digitising existing processes but in transforming how regulators identify, understand and respond to risks across the digital ecosystem.

Meanwhile, the CBN Governor, Olayemi Cardoso, who addressed participants virtually, assured staff that the apex bank was in a strong position following ongoing reforms.

Cardoso said the reforms were designed to strengthen the institution and protect career officers, stressing that institutionalisation would ensure that reforms became embedded in the Bank’s culture, systems and processes.

“The Bank is in a good place. Our staff have nothing to fear. Reform and institutionalisation are not a threat to the career officer; they are the protection of the career officer,” he said.

The governor said the CBN had recorded progress in several areas, including the completion of a bank-wide culture survey designed to give staff an opportunity to contribute to shaping the institution’s future.

He also commended the Bank’s workforce for its recent international recognition, saying the achievement reflected the dedication and professionalism of employees across the institution.

The Chairman of the Committee of Departmental Directors, Jimoh Musa Itoba, described the directors as the “major anchors” of the CBN and urged them to take greater responsibility for driving financial stability and supporting Nigeria’s economic growth.

Itoba said the retreat provided an opportunity for directors to critically examine the Bank’s role in advancing the economy and supporting Nigeria’s aspiration of becoming a $1tn economy.

He urged participants to challenge existing practices and develop practical solutions that management could implement.

Earlier, the Secretary of the Committee, Rashida Monguno, called on directors to embrace innovation, strategic thinking and stronger collaboration in responding to emerging challenges.

She said the rapidly changing operating environment required continuous assessment of the Bank’s performance, identification of gaps and development of innovative approaches to improve efficiency and service delivery.

Monguno expressed confidence that the retreat would produce recommendations capable of strengthening institutional performance and coordination across the CBN.