Auditors urged on cyber security, ESG in banking
By Olamide Akintunde Auditors have been urged to adopt a more proactive and strategic approach to addressing fresh risks associated with daily banking operations. These risks are driven by the
By Olamide Akintunde
Auditors have been urged to adopt a more proactive and strategic approach to addressing fresh risks associated with daily banking operations. These risks are driven by the unfolding rapid digital innovation, including evolving Environmental, Social, and Governance (ESG) standards.
The call was made by Chairperson of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), Aina Amah at the annual retreat, conference and general meeting of the association.
Speaking at the event, Amah said this year’s conference: “Navigating Future Technology and Governance Risks in the Nigerian Financial Sector,” was shaped by the accelerating pace of digital transformation and the rising wave of cyber threats.
She noted that while technological advancements have improved business operations, they have also exposed institutions particularly in the financial sector to significant vulnerabilities.
“In the last few years, digital innovation has grown rapidly, but with it come attendant risks. Cyber threats are increasing, and as auditors, this is the time to take decisive action to mitigate these risks,” she said.
She warned that failure to address these challenges could allow “bad actors” to undermine technological progress, stressing that auditors must move beyond traditional roles to safeguard the integrity of systems.
Amah also highlighted the growing importance of ESG compliance, describing it as a critical component of modern business practices. According to her, Nigeria can no longer afford to treat ESG issues as optional, especially in light of global environmental changes and increasing regulatory demands.
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“ESG has come to stay. With global warming and environmental challenges now a reality, organisations must ensure that their operations do not harm the ecosystem or rely on unethical practices,” she stated.
She emphasised that sustainable practices not only protect the environment but also ensure long-term profitability and stability for businesses.
Addressing upcoming auditors, Amah urged them to evolve with the profession by becoming strategic advisors rather than mere reporters of past failures. She explained that the modern audit function requires professionals to anticipate risks and prevent them before they occur.
She said: “Nobody is interested in reports that only highlight what has gone wrong. Auditors must now be part of the process, ensuring that risks do not materialise in the first place”.
On the role of technology, Amah stressed that its adoption is no longer optional, urging auditors to embrace tools such as artificial intelligence and data analytics to improve efficiency and deliver more impactful insights.
“Technology has come to stay. Auditors must be at the cutting edge, using data analytics instead of lengthy reports to communicate findings faster and more effectively,” she added.
Looking ahead, she expressed optimism that auditors who adapt to these changes will become indispensable within their organisations.
“In the near future, auditors will be the go-to professionals for advice and strategic input, provided they position themselves as value adding partners,” she said.
Amah identified cyberattacks as the most urgent technology driven risk facing Nigeria’s financial sector, calling for stronger security measures, including regular vulnerability assessments and system testing.
“As institutions advance technologically, cybercriminals are also evolving. Organisations must reinforce their systems continuously and not wait for regulatory deadlines before acting,” she warned.
The conference featured sessions where experts in auditing and the banking sector delivered presentations aligned with the event’s theme.
The Associate Director, Technology Risk KPMG Africa, Chukwuemeks Igbabari, reinforced the urgency of integrating ESG into banking operations, risk management, and audit frameworks. He noted that ESG has evolved from a corporate responsibility initiative into a core financial and regulatory risk.
“Our world is changing, and the impact of environmental, social and governance factors on financial services is becoming more significant. Investors want to understand how institutions measure ESG performance, and regulators are increasingly making disclosures mandatory,” he said.
Igbabari explained that global frameworks such as IFRS S1 and S2 are setting new standards for sustainability disclosures, requiring institutions to provide transparent, accurate and decision-useful information. According to him, investors are increasingly incorporating ESG metrics into their investment decisions, placing additional pressure on banks to demonstrate readiness.
“There is a strong demand for transparency. Stakeholders want to see that ESG disclosures are accurate, verifiable and reliable,” he said.
He highlighted key ESG risk areas, including climate related financial risks, social inclusion, customer protection, and governance practices. He stressed the need for strong board oversight and warned that weak governance could lead to reputational damage, including accusations of greenwashing.
Igbabari also raised concerns about the integrity of ESG data, describing “data pollution” as a major challenge that could undermine sustainability reporting. He called for structured data systems and robust internal controls to ensure the credibility of disclosed information.
“Without reliable data, ESG reporting loses its value. Institutions must be able to stand by the numbers they disclose,” he said.
Participants at the conference also discussed the need to integrate ESG into audit frameworks, strengthen governance systems, and align with global reporting standards. They noted that rising demand from investors and regulators has made sustainability reporting a top priority for financial institutions.
With regulatory scrutiny intensifying and technological risks growing more complex, stakeholders at the event agreed that the auditing profession in Nigeria is at a critical turning point, requiring innovation, adaptability and a forward-looking approach.
