The Director-General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa, has called for a fundamental review of Nigeria’s financial sector regulatory framework, arguing that conventional supervisory methods are no longer sufficient to manage the risks created by modern digital banking.

Inuwa made the call while delivering a presentation titled “Digital Transformation, Supervision, Innovation and Operational Resilience” at the 15th Retreat of the Central Bank of Nigeria (CBN) Committee of Departmental Directors in Lagos.

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

According to Inuwa, the transformation of banking from physical branches to internet and mobile banking, fintech platforms and embedded finance has produced a complex digital ecosystem that requires regulators to adopt a fundamentally different approach.

He said regulatory oversight should extend beyond individual financial institutions to cover the broader network of technologies, platforms and infrastructure that now support financial services.

Inuwa stressed that digital stability has become inseparable from financial stability.

“To achieve financial stability, we need digital stability. Without digital stability, today we cannot be talking about financial stability in the financial sector,” he said.

He pointed out that modern financial services increasingly rely on telecommunications infrastructure, cloud platforms, digital marketplaces, fintech companies, data systems and emerging technologies.

Against this backdrop, the NITDA director-general urged regulators to develop real-time visibility across the financial ecosystem instead of depending primarily on periodic returns from regulated institutions.

“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 drew a distinction between digitalisation and digital transformation. While digitalisation involves using technology to improve existing processes, he explained that digital transformation requires organisations to reconsider their business models and develop new value propositions.

He encouraged regulators and financial institutions to embrace ecosystem-driven innovation that can respond to the rapid pace of technological change.

On operational resilience, Inuwa said financial institutions must expand their focus beyond traditional cybersecurity frameworks. He identified third-party and fourth-party risks, cloud governance, data protection, artificial intelligence oversight and the sustainability of digital infrastructure as areas requiring greater attention.

He identified the increasing reliance on external technology providers as one of the major emerging risks to financial systems. According to him, disruptions affecting cloud services, connectivity infrastructure or digital platforms could produce consequences across the wider financial ecosystem.

The NITDA boss also highlighted the growing cyber threats associated with artificial intelligence, warning that AI systems themselves were increasingly becoming targets of sophisticated attacks.

He said financial institutions needed to use AI to reinforce cyber defence while also ensuring that AI-powered systems were protected against manipulation and compromise.

Inuwa further stressed the importance of developing local digital talent and strengthening institutional capacity to improve financial supervision and build Nigeria’s long-term resilience.

He connected financial stability with digital sovereignty, arguing that countries need meaningful control over the digital infrastructure that supports critical areas of their economies.

“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 therefore called on policymakers to adopt a system-wide supervisory model that considers not only regulated financial institutions but also the technologies, platforms, infrastructure and stakeholders collectively sustaining contemporary banking.

“The future of supervision is not merely to digitise regulation, but to digitally transform how regulators sense, understand and respond to risks across the ecosystem,” Inuwa said.

Speaking virtually at the retreat, CBN Governor Olayemi Cardoso assured members of staff that the apex bank remained in a strong position as its reform programme continued.

Cardoso said the transformation agenda was intended to strengthen the institution while safeguarding the interests and career progression of its officers.

“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 made progress in several strategic areas, including completing a bank-wide culture survey that allowed employees to contribute to shaping the institution’s future.

He described institutional culture as the foundation for sustainable reforms and said feedback from staff would remain an important driver of meaningful action.

Cardoso also commended the CBN’s recent international recognition, saying it reflected the dedication, professionalism and commitment of its workforce.

He called on directors to empower their teams, promote constructive engagement and improve collaboration among departments.

The Chairman of the Committee of Departmental Directors, Jimoh Musa Itoba, also challenged directors to assume greater responsibility for promoting financial stability and contributing to Nigeria’s economic growth.

Itoba described the directors as the “major anchors” of the CBN and custodians of its processes, culture and institutional memory.

He said the retreat provided an opportunity to critically consider how the apex bank could help advance the Nigerian economy and support the country’s ambition of becoming a $1 trillion economy.

“The directors are the major anchors of the Bank,” he said, adding that employees across the institution looked to the directors for direction and leadership.

Itoba urged the directors to question existing narratives, participate openly in discussions and concentrate on practical solutions that could improve financial system stability and strengthen public trust.

“Let us be committed, let us get engaged, and make sure that at the end of this retreat, we are not only questioning what we do today but also providing solutions that management can implement,” he said.

Earlier, the Secretary of the Committee of Departmental Directors, Rashida Monguno, urged directors to embrace innovation, strategic thinking and stronger collaboration as the CBN responds to emerging challenges.

Monguno said the rapidly evolving operating environment made continuous performance assessments and bold solutions necessary.

She described the retreat’s theme as timely, saying the CBN must consistently evaluate its progress, identify gaps and develop innovative methods to improve effectiveness, efficiency and service delivery.

She encouraged participants to draw on their expertise and experience to develop fresh ideas, exchange best practices and establish a clear direction for the bank.

Monguno expressed confidence that the retreat would result in recommendations capable of improving institutional performance and strengthening coordination across departments.

Source:The Sun