Regulators to Deploy AI Against Illegal Financial Operators, Cyber Threats

Nigeria’s financial regulators have raised fresh concerns over the growing threat posed by illegal financial operators and rising cybersecurity risks, warning that the activities could undermine stability in the nation’s financial system if left unchecked.

The warning came as the Financial Services Regulation Coordinating Committee (FSRCC) announced measures, including the deployment of Artificial Intelligence-powered surveillance tools and tighter oversight of fintechs and crypto assets to curb financial crimes and strengthen market integrity.

This was part of the resolutions reached at the 80th meeting of the Committee which consist of regulators in the industry which include the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), Corporate Affairs Corporation (CAC), National Pension Commission (PenCom), Financial Reporting Council (FRC), Federal Ministry of Finance, Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM).
In a communiqué signed by the secretary of the Committee, Dr. Rita Sike, the regulators acknowledged that although Nigeria’s financial sector remained resilient, emerging threats from unlicensed operators, cybercrime and weak regulatory compliance required urgent and coordinated action.
The Committee disclosed that it had resolved to intensify enforcement actions against illegal financial operators while deepening collaboration among regulatory agencies to improve monitoring and early detection of suspicious financial activities.
As part of the new measures, the FSRCC said regulators would deploy predictive analytics and Artificial Intelligence tools to identify illegal activities within the financial system before they escalate.
The Committee also approved broader use of USSD channels to enable Nigerians verify licensed financial institutions and operators, alongside intensified public sensitisation campaigns aimed at protecting investors and depositors from fraudulent schemes.
The latest move comes amid growing concerns over the increasing sophistication of cyber-related attacks and the proliferation of illegal investment platforms targeting unsuspecting Nigerians.
Despite the concerns, the Committee said the country’s financial sector had continued to record strong performance, particularly in the capital market where market capitalisation exceeded N161 trillion, supported by increasing domestic investor participation.
The FSRCC also noted the successful completion of the banking sector recapitalisation exercise, describing it as a critical step towards strengthening the resilience of the banking industry. It further acknowledged ongoing recapitalisation reforms in the insurance, pension and capital market sectors aimed at positioning the financial system for sustainable growth.
The regulators equally welcomed ongoing efforts to sustain payments to depositors affected by the collapse of Heritage Bank, Union Savings & Loans Ltd. and Aso Savings & Loans Ltd., although they identified judicial bottlenecks and documentation gaps as major impediments slowing the process.
The Committee stressed the need for stronger coordination between fiscal and monetary authorities to sustain macroeconomic stability and maintain investor confidence.
It also called on state and local governments to adopt reforms that improve transparency, accountability and liquidity while encouraging greater use of structured capital market instruments to finance infrastructure and development projects.
In a move to strengthen the country’s cyber defence framework, the Committee approved the establishment of a dedicated cybersecurity working group across member agencies to improve response coordination against cyber threats within the financial sector.
Members of the Committee also highlighted recent reforms across the financial system, including improvements in tax administration, pension sector deepening initiatives, stronger sustainability reporting standards and innovations aimed at improving the quality and consistency of financial reporting.