In an era where technology is at the heart of financial operations, the protection of a country’s cyberspace has become paramount for the security of financial transactions and innovation. The vulnerabilities within Nigeria’s Information Technology (I.T) infrastructure pose significant risks to the financial sector and the wider economy.
Over the last five (5) years, the financial sector in Nigeria has experienced rapid digitization with electronic transactions becoming the norm. While this digital transformation has brought about increased efficiency and convenience, it has also exposed the sector to various cybersecurity threats, from cyber-attacks targeting financial institutions to phishing scams aimed at unsuspecting customers.
In Nigeria, according to reports (Business Day 2023), the value of fraud in 2021 was put at N193.5 billion ($544 million), an increase from the N153.4 billion ($431 million) lost in 2020. This trend continued upwards in the following years when losses due to fraud topped N273 billion ($762 million) in 2022.
One of the major dangers of inadequate investment in cyberinfrastructure is the susceptibility of financial institutions to cyber-attacks from criminals who continuously create new tactics and strategies to get victims. With the emergence of Artificial Intelligence (AI) and Machine Learning (ML), hackers can create more targeted and personalized phishing campaigns using deep fake and other generative AI tools. Without robust and up-to-date cybersecurity measures and infrastructures in place, financial institutions are at risk. These attacks go a long way in compromising the security of financial transactions and eroding customers’ confidence in the banking system.
Furthermore, inadequate investment in cyberinfrastructure limits research and innovation within the financial sector. As the world becomes increasingly digital, there is a need for innovative financial solutions that leverage technology to improve access to financial services and drive economic growth.
The recent directive by the Central Bank of Nigeria to implement the cybersecurity levy on selected electronic transactions is targeted at generating funds to support cybersecurity initiatives in Nigeria. The government must further prioritize cybersecurity by exploring other channels of financing the National Cybersecurity Fund as provided in the Cybercrime Act 2015. This includes appropriations from the National Assembly, grants-in-aid, and assistance from donor, bilateral, and multilateral agencies. The government should invest in cutting-edge cybersecurity technologies, enhancing collaboration between government agencies and private sector stakeholders, and implementing comprehensive cybersecurity regulations and standards.
Moreover, there is a need for increased awareness and education about cybersecurity best practices among both financial institutions and the general public. Many cyber-attacks exploit human error and ignorance, such as clicking on malicious links or sharing sensitive information online. By educating users about the importance of cybersecurity and providing them with the knowledge and tools to protect themselves online, Nigeria can significantly reduce the risk of cyber threats.
Safeguarding Nigeria’s cyberspace is paramount for both financial security and innovation. Adequate investment in cyber security infrastructure, coupled with increased awareness and education around cybersecurity best practices, will not only protect the financial sector from cyber threats but also encourage a culture of innovation and digital growth.