Financial services regulators have their work cut out, amid heightened cyber crimes and credit risks reinforced by the Corona virus (COVID-19) pandemic, thereby triggering fears of solvency in Nigeria’s banking sector.
Such fears notwithstanding, the regulators – the Nigerian Deposit Insurance Corporation (NDIC), and the Central Bank of Nigeria (CBN), have reassured stakeholders that there is no cause for alarm, as they are constantly devising strategies to remain ahead of fraudsters and cyber-criminals.
Specifically, the NDIC insisted that “The Nigerian Banking System is not under threat of systemic crisis. Prompt and decisive interventions by the regulatory authorities have provided counter cyclical buffers for the economy and the financial system.”
Giving the assurance at a just-concluded workshop for journalists, which ended the weekend in Kaduna, the Director, Bank Examination Department, NDIC, Dr. O. O. Babatolu, also said the regulators Continue to build resilience in the financial system by implementing proactive policies.
Babatolu, who spoke on, “Risk Management Strategies for the Banking Industry to Deal With a Pandemic or Crisis,” listed other measures taken to foster financial system stability.
They include to ensure enhancement to bank’s risk management and governance, ensure proactive crisis management and effective resolution, facilitate orderly evolution of market infrastructure for liquidity buffers and non-performing loan (NPL) resolution, and ensure compliance with rules and regulation; including the integrity of reporting
He said this is critical to ensuring that financial services bring about the greatest benefits to consumers, as “The COVID-19 pandemic has indeed exposed humanity to a ‘new normal’ that is continuously affecting social and economic activities.”
He identified a number of challenges impeding consumer protection such as infrastructure deficit (low internet penetration, power, security, etc.); understanding consumer behavior; fraud and cyber security; low financial and digital literacy, and the need for a robust legal framework.
He, therefore, assured that the CBN will continue to provide a suite of regulatory interventions to ease its impact on banking and financial services delivery; issuance of fraud and cyber security advisories to alert and protect consumers from the activities of fraudsters, to mitigate the risks associated with the use of financial products or services by the consumer.
Meanwhile, in his assessment of the “COVID-19 and Fintech in the Nigerian Financial System,” the Deputy Director, Research Department, NDIC, Dr. Kabir Katata, urged complementary efforts to bring FinTech and big tech lenders into the fold of official regulatory reporting.
He also stressed the need “to ensure that authorities and researchers have the proper data to monitor and study FinTech and big tech credit platforms.”
He noted that “As regulatory oversight increases, a thorough understanding of financial services in the Nigerian context, particularly in compliance, is becoming a prerequisite for success.”
He added that “Most fintech have a technology background but limited experience in financial services and will need to ensure that they develop or acquire this competency.”
CREDIT: GUARDIAN NG