In Africa, as the financial and banking services industries continue to embrace digital transformation, cybersecurity is a growing concern for regulators and executives. Cyber attacks have increased in sophistication and frequency, and the consequences can be devastating for financial institutions, including reputational damage, financial loss, and legal liability. In this context, it is imperative to enhance governance requirements that increase board and executive responsibility for cybersecurity. Cybersecurity has become a necessity in today’s digitally interconnected world, especially for the banking and financial service sector. Cyber threats, such as ransomware attacks and phishing, pose a serious risk to both businesses and customers. Companies are investing in cybersecurity technologies, but there is still a need for improved governance requirements to increase executive and board accountability for cybersecurity. These requirements are even more important in Africa’s banking sector, which is a high-risk area for cybersecurity.
Cybersecurity: The role of governance
Governance is an essential component of effective cybersecurity. It includes the policies, practices, and procedures that govern how an organisation protects and manages its digital assets. In order to have effective cybersecurity governance, the board of directors and executive management must be involved in the setting of cybersecurity strategy, risk management, and oversight. The board of directors’ ultimate responsibility is to oversee the cybersecurity of an organisation. The board must set clear expectations with executive management on cybersecurity matters and regularly review the organisation’s risk management and cybersecurity strategies. Executive management should, in turn, develop and implement effective policies and procedures for cybersecurity, allocate adequate resources, and report regularly to the board about cybersecurity risks and incidents.
Need for enhanced governance requirements:
Cyber threats are becoming more complex and frequent, and therefore it is necessary to enhance governance to make board members and executives more accountable for cybersecurity. This enhancement will ensure that cyber risks are treated with the same attention and focus given to other strategic risks within the organisation. Cyber threats can have serious financial, legal, and reputational consequences for businesses. Inadequate cybersecurity measures may lead to data breaches and financial losses as well as regulatory fines and reputational damage. It is, therefore, essential that executives and boards understand the cybersecurity threats facing their business and take appropriate steps to mitigate them. Implementing enhanced governance requirements will help increase the accountability of board members and executives for cybersecurity.
The implementation of these requirements should cover the following aspects:
Cybersecurity Training: Executives and board members should be regularly trained in cybersecurity to ensure they are aware of the latest cyber threats and how to defend their business against them. The training should include topics such as phishing scams and ransomware attacks.
Companies should regularly conduct risk assessments in order to identify vulnerabilities and cybersecurity risks. These assessments should be reported back to the board, and appropriate measures taken to mitigate risks.
Incident Response Plans: Companies should have plans that detail the steps they will take in the event of an incident involving cybersecurity. Plans should be reviewed and updated regularly, and any changes should be communicated to the board.
Public Disclosure: Companies must publicly disclose any cyber incidents that could have an impact on customers or stakeholders. This disclosure should be done promptly and include the details of the incident as well as the steps taken to minimise its impact.
Regulation of Public Disclosure in Africa’s Banking and Financial Services Space:
The public disclosure of cybersecurity incidents is a key element in enhancing governance requirements. Disclosure of cybersecurity incidents to the public can promote transparency and accountability and allow stakeholders to evaluate the cybersecurity risk profile for financial institutions. This also encourages financial institutions to invest in cybersecurity risk and improve their cybersecurity posture. In light of the increasing cybersecurity risks in the banking and financial sector, it is important to regulate public disclosure. The Cybersecurity Act 2020 in Ghana includes provisions that require mandatory reporting of cyber incidents to the designated responsible bodies. Similar regulatory frameworks have been introduced in other African countries to improve cybersecurity governance and public disclosure. In the Central Bank of Nigeria’s Cybersecurity Guidelines for Deposit Money Banks and Payment Service Providers, for example, financial institutions are required to report cybersecurity incidents to the Central Bank of Nigeria as well as to other regulatory bodies. Financial institutions are also required to perform regular assessments of cybersecurity risks and implement effective cybersecurity control measures.
These regulations should include the following:
Timeline: Regulators should specify a timeline for companies to disclose cybersecurity incidents. The timeline should be reasonable and allow companies enough time to investigate and assess the impact of the incident.
Content: The regulations should specify what information is to be disclosed, such as the details of the incident or the mitigation measures taken. Disclosure should be concise, clear and accessible to all parties.
Enforcement: The regulations should state the consequences for non-compliance. The severity of the incident should determine the consequences. This will act as a disincentive to non-compliance.
Collaboration: Regulators should encourage companies to collaborate with regulators when a cybersecurity incident occurs. This collaboration can reduce the impact of an incident and help prevent it from recurring.
In conclusion:
The banking and financial service industry in Africa must enhance governance requirements to increase board and executive responsibility for cybersecurity. In order to combat the increasing complexity and frequency of cyber threats, it is essential that governance requirements are enhanced. This will ensure that cybersecurity risks can be treated as enterprise-wide risks, and that executives and board members have the skills and knowledge necessary to oversee cybersecurity. The public disclosure of cybersecurity requirements is a key aspect of enhancing governance. Regulation of public disclosure can promote transparency and accountability in Africa’s financial and banking services sector and allow stakeholders to assess the cybersecurity risk profile of financial institutions. Effective cybersecurity governance and public reporting will be critical as the industry continues its digital transformation. This will ensure the security and resilience of the financial system.
