Internet fraud - Conscious of the impact Information Technology (IT) plays in the banking industry; the Central Bank of Nigeria (CBN) has said it adopted various measures to help banks deal with increasing technology risks.
Director, Banking Supervision, CBN, Mrs. Olatokunbo Martins, said this at the 1st Annual Conference on Audit and Regulatory Examination of Banking Technologies held in Lagos yesterday.
According to her, the banking sector regulator was desirous of ensuring the safety and soundness of the banking industry by eliminating anything that poses as threat.
Martins added: 'Where is the next crisis going to be? Our concern is that we don't want the next crisis to come from what we are hearing about cyber espionage around the world because those figures that we are hearing are quite alarming. 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.'
She further stated that each technology that a bank adopts presents unique risks that raise safety and soundness concern.
'By 2014 hopefully the banking industry should be Basel 11 compliant. This will bring about improved capital buffers and to protect the banks and make them more resilient,' Martins added.
Earlier, in his address, Chairman, Audit Committee Institute, Nigeria, Mr. Christian Ekeigwe, warned that with the nature of cybercrime, a single incident 'can take down a strong bank and it happens at the electronic speed.'
He urged banks to adopt a new mindset on control in order to ensure that their institutions are not affected.
'This conference will focus attention on the key issues of banking technology risks, how auditors must audit them to assurance and the proposition that technology risks contributed, insidiously, to the distress in the industry,' Ekeigwe added.
By Obinna Chima