For decades, compliance and risk management in banking were seen as bureaucratic necessities rather than drivers of innovation. They were regarded as cost centers, functions that slowed down creativity, buried executives under paperwork, and stood in the way of aggressive expansion.
In Nigeria and across Africa, that perception has persisted, with many entrepreneurs and even some senior banking executives viewing compliance as a burden to be tolerated rather than a resource to be leveraged. Yet the realities of today’s global financial system make it clear that this perception is outdated. Risk governance is no longer just about avoiding penalties; it is increasingly a critical determinant of competitiveness, profitability, and long-term survival.
My years in Nigerian banking, working across Heritage, Keystone, and Providus, have shown me the practical consequences of neglecting risk oversight. I have witnessed businesses crumble under the weight of fraud, cyberattacks, and poor governance, and I have also seen institutions thrive by embedding governance frameworks into their growth strategies.
At Providus, where I contributed to client and risk management, adopting global compliance standards became a decisive factor in positioning the institution as a trusted partner for multinational corporations. Far from slowing down growth, robust governance became the enabler that opened doors to new opportunities.
Trust remains the currency of banking. Every naira deposited represents a client’s confidence that the institution will safeguard their funds and provide stability in return. When that trust is broken, through fraud or mismanagement, the ripple effects can destabilize entire economies. Nigeria has learned this lesson the hard way.
The 2009 banking crisis, which led to sweeping reforms by the Central Bank of Nigeria, was caused in part by weak risk oversight. The reforms that followed demonstrated that governance was not merely a box to tick; it was the very foundation of stability. Globally, too, the evidence is consistent. From the billion-dollar fines paid by HSBC for compliance lapses to Wells Fargo’s struggles with governance scandals, the message is clear: weak compliance costs far more than robust governance ever will.
The global shift is not just about avoiding failure but about building competitive advantage. Banks with strong governance frameworks are more attractive to investors, enjoy better relationships with regulators, and inspire greater confidence among corporate clients. During my work in risk management, I saw how aligning with global frameworks such as Basel III and ISO standards elevated Nigerian banks in the eyes of international partners. Multinational corporations are reluctant to expose themselves to weak systems, and compliance became the differentiator that won their trust. Risk governance, in this sense, has moved from being defensive to offensive, from being a shield against fines to becoming a strategy for growth.
Cybersecurity is one of the most urgent areas where governance creates measurable competitiveness. With banking increasingly digital, the risks of cyberattacks are escalating. Fraudulent transfers, ransomware, and phishing are no longer occasional disruptions; they are persistent threats that can drain billions from institutions. In the United States, where I worked extensively on compliance systems for public programs, embedding cybersecurity frameworks into operations saved billions by preventing fraud. Nigerian banks face similar threats, and those that adopt international standards like NIST will not only protect their clients but also distinguish themselves as reliable players in a global market.
Third-party risk management is another critical issue. Banks today rely heavily on vendors, from IT providers to fintech partners. Yet, in conducting more than 25 vendor security assessments, I found that vendors often represent the weakest link in an institution’s security chain. If a vendor is compromised, client data is at risk, regardless of how strong the bank’s internal systems are. In the Nigerian context, where fintech collaborations are booming, banks that implement rigorous vendor oversight will be the ones that survive the inevitable rise in cyber-enabled fraud.
Data protection is emerging as a defining standard. With the passage of the Nigeria Data Protection Act in 2023, the country is aligning itself with international norms such as Europe’s GDPR. This is not just a regulatory milestone; it is an economic opportunity. Banks that prioritize privacy and data protection will not only comply with domestic law but also attract global partners who are unwilling to risk reputational damage by associating with weak institutions.
The importance of governance also extends to the global sustainability conversation. Investors worldwide are increasingly directing funds towards institutions that demonstrate strong environmental, social, and governance (ESG) practices. Nigerian banks that embed governance into ESG reporting will be better positioned to access impact investment and development finance, resources that can drive long-term growth.
For Nigeria and Africa more broadly, the way forward requires a shift in both culture and policy. Bank leadership must begin to see compliance not as a hindrance but as an opportunity to differentiate themselves in crowded markets. Regulators can play a role by rewarding strong governance with tangible incentives, such as faster approval for innovative products or reduced capital reserve requirements.
At the institutional level, there must be investment in talent pipelines that professionalize risk and compliance as career paths capable of attracting top talent. Finally, technology should be leveraged to make compliance more efficient, from artificial intelligence tools that detect fraud in real time to blockchain solutions that ensure transaction transparency.
Africa cannot afford to treat governance as a secondary concern. The continent’s financial sector is integrating rapidly into global systems through trade, remittances, and digital transactions. Weak compliance will cut institutions off from international capital, while strong governance will make them magnets for investment. This is the central lesson I have carried from my professional journey across Nigerian and global contexts: governance and risk are not the brakes on growth, they are the engine.
As African banks position themselves for the future, those who invest in risk governance today will emerge not only as survivors but as leaders in the global financial system.
