United Bank for Africa (UBA) Group Managing Director and Chief Executive Officer, Oliver Alawuba, has cautioned banks against embracing artificial intelligence without first establishing a clear understanding of the risks associated with the technology, warning that innovation without proper governance could expose financial institutions to significant operational and reputational threats.
Speaking at the 64th Quarterly General Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), Alawuba said the rapid integration of AI into banking is transforming decision-making processes, with automated systems increasingly handling customer transactions, fraud detection, lending decisions and compliance functions at unprecedented speed. He stressed that while AI offers enormous opportunities, it also introduces new vulnerabilities that require stronger oversight.
Brandspur Banking News Desk reports that Alawuba urged banks to equip internal audit teams with the technical expertise needed to evaluate AI-driven systems, including knowledge of machine learning, cybersecurity, data governance, cloud infrastructure and model risk. According to him, financial institutions cannot effectively supervise technologies they do not fully understand, making continuous capacity building essential.
He further maintained that internal auditors must preserve their independence despite increasing pressure to accelerate digital transformation, noting that rapid innovation should never come at the expense of sound governance, effective controls and accountability. He added that closer collaboration among audit, compliance, technology, risk management and business units will be necessary to manage emerging AI-related risks across the banking sector.
Also speaking at the event, ACAEBIN Chairperson Aina Amah identified cybercrime as one of the most pressing challenges confronting Nigerian banks, saying attackers continue to evolve their methods in search of weaknesses within financial institutions. She encouraged banks to strengthen cybersecurity capabilities, invest in specialised expertise and improve information-sharing across the industry to prevent recurring fraud incidents.
Amah also disclosed that several banks have introduced enterprise-wide fraud monitoring systems and dedicated surveillance teams capable of detecting suspicious transactions in real time, describing collaboration between financial institutions and law enforcement agencies as critical to improving prosecution of cybercriminals and protecting customers’ funds and personal data.
