Innovation Risk Management in the Nigerian Banking Sector: An Assessment of Regulatory Frameworks

Innovation in the banking sector of Nigeria has significantly increased due to the emergence of digital technologies like mobile banking, blockchain, and FinTech platforms. However, the advancements have exposed the banking sector to additional risks related to cybersecurity, data privacy, and regulatory compliance. The study examines the major regulatory tools that oversee risk management in the banking industry’s adoption of innovative technologies. A combination of legal research and collected evidence was employed to identify the advantages and disadvantages of existing regulations. Evidence suggests that larger financial institutions have the resources and capabilities to implement the regulations, while smaller banks and FinTechs struggle with these barriers. The study suggests measures to align regulations, strengthen supervision, and implement international standards to promote innovation while mitigating dangers to the stability of financial institutions. The results help inform decision-making and set a framework for designing solutions that promote the stability and equality of the Nigerian banking sector.