CBN foresees major risks for Non-Interest Banks despite growth

The Central Bank of Nigeria (CBN) has predicted plausible technological and operational risks for Non-interest banks in Nigeria despite growth and expansion into digital finance.

The Apex bank warned that weak governance, Cybersecurity threats, and technological vulnerabilities are a likely outcome for operators in Nigeria’s non-interest market, according to a Thisday Report. Non-interest banks (NIBs) are financial institutions that conduct banking activities without charging or paying interest, operating on ethical and Profit-loss sharing principles.

Popular NIBs brands in Nigeria include Jaiz Bank, Lotus Bank, Taj Bank, and the alternative bank. CBN’s warnings for this sector come at a time when they are increasingly leveraging technology in their everyday activities.

The Non-interest banks are increasingly embracing digital platforms, mobile banking systems, and automation to drive growth and reach new customers. However, this technology-backed expansion is creating loopholes and leaving grounds for exploitation by bad actors. Losses caused by operational errors or mismanagement are also a factor to be considered.

CBN believes NIBs expanding fast on the back of digital finance are largely prone to cyberattacks, data breaches, system failures, insider abuse, and weak digital governance structures.

CBN’s warnings align with those of the Director General of NITDA, Kashifu Inuwa. Inuwa pointed out at the World Economic Forum (WEF) that Nigeria’s fast-growing digital landscape is accompanied by a poorly prepared security architecture. This, he claims, leaves room for exploitation.

This is also quite similar to the warnings of the International Monetary Fund. The IMF says that advances in Artificial Intelligence pose a serious threat to global financial systems. They also think AI could be exploited by bad actors to breach systems.

Technological analysts believe players in Nigeria’s Non- Interest Banking ecosystem are heavily dependent on technology. Key tasks for most NIBs include digital onboarding systems, online payment infrastructure, API-driven fintech partnerships,cloud-based services, mobile banking applications, and data analytics platforms.

The CBN thinks this is a huge problem, as over-dependency on technology comes with its downsides. It believes this could only be mitigated by stronger cybersecurity frameworks, Digital risk management, and Data protection compliance.

Besides technological risks, the CBN also warned of governance failure for NIBs operators. It harped on the threat of customer distrust and reputational damage for any bank that falls victim.

CBN’s alarm on impending technological risks for NIBs highlights its growing oversight. It signals an oversignt expansion from Financial status and health. To technological well-being as well, following the massive expansion of digital finance in Nigeria’s financial space.

Last updated: May 12, 2026