Zenith Bank, Access, GTCO, others intensify cybersecurity investments
By Esther Agbo
Amid new capital mandates from the Central Bank of Nigeria (CBN), Nigerian banks are ramping up their investment in technology and cybersecurity.
Five major financial institutions have outlined plans to allocate a significant portion of their capital-raising efforts to bolster their IT infrastructure, highlighting the growing importance of digital security in the banking sector.
These banks, which are Guaranty Trust Holding Company (GTCO), Access Holdings, Zenith Bank Plc, Fidelity Bank, and FCMB Group, have collectively budgeted N222 billion ($1.20 billion) for technology upgrades, with a particular emphasis on strengthening cybersecurity frameworks.
The move comes in response to the CBN’s recent directive, which requires banks to meet higher capital thresholds over the next two years. Under this directive, commercial banks with international authorisation must increase their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion.
GTCO is leading the charge with a budget of N98.50 billion dedicated to enhancing its technology infrastructure, including a substantial investment in core banking applications and data centre optimization. Of this amount, N15 billion is earmarked specifically for information security and fraud prevention measures.
This allocation is part of GTCO’s broader strategy to recapitalise its banking subsidiary and expand its reach in the pension and asset management sectors.
Access Holdings has also committed a considerable sum to IT infrastructure, with N27.48 billion set aside for cybersecurity enhancements.
The bank’s total investment in technology stands at N68.62 billion, underscoring its focus on building robust digital defences in the face of increasing cyber threats.
Zenith Bank, meanwhile, plans to invest N19.85 billion in technology, including N2.98 billion for cybersecurity.
The bank’s strategy includes a comprehensive overhaul of its IT systems, aimed at supporting its expanding operations and capitalising on new business opportunities.
Fidelity Bank and FCMB Group have similarly allocated significant portions of their capital raise to technology upgrades, with N9.03 billion and N5.23 billion, respectively, dedicated to cybersecurity initiatives.
These investments come at a time when Nigerian banks are facing heightened cyber risks, as evidenced by recent attempts to compromise the websites of major banks, including GTB.
The heightened focus on cybersecurity is not without cause. A recent Global Financial Stability Report from the International Monetary Fund (IMF) highlighted the increasing risk of extreme losses from cyber incidents, which have the potential to disrupt financial stability.
According to the IMF, losses from cyber incidents have more than quadrupled since 2017, reaching $2.5bn, with indirect losses such as reputational damage and security upgrade costs adding significantly to the financial impact.
In light of these developments, Nigerian banks are not only responding to regulatory pressures but are also proactively safeguarding their operations against the rising tide of cyber threats.
The combined N222 billion investment in technology and cybersecurity by these five banks underscores a broader trend in the financial industry, where digital security is becoming a cornerstone of business strategy.
