Nigerian experts call for stronger digital security as new law tightens market oversight

Nigerian financial market experts are sounding the alarm on the urgent need for advanced security measures to protect the country’s increasingly digital trading and settlement platforms. Their recommendations come as the government ushers in sweeping regulatory reforms, including the landmark Investment and Securities Act (ISA) 2025, which brings digital assets firmly under regulatory control.

At the recent African and Middle East Depositories Association (AMEDA) conference in Lagos, industry leaders highlighted the growing risks facing Nigeria’s capital markets. Stuart Turner, CEO of Avenir Technology Limited, emphasized that resilient system architecture and cutting-edge security models are now essential.

“The key is to prioritize a resilient architecture spread across data centers. Specifically, the zero-security model, where individuals can access trading and settlement systems but must verify every action they take, makes it much harder for breaches to occur,” Turner said.

Experts are urging the adoption of “zero trust” security frameworks, which require continuous verification of every user action, and advanced reCAPTCHA technologies that analyze human behaviors-such as the way passwords are entered-to identify imposters and block unauthorized access. These measures are seen as crucial in an era where artificial intelligence can now bypass traditional security tools like Google’s reCAPTCHA v2 with near-perfect accuracy.

Jim Micklethwaite, Managing Director of Financial Markets at Thomas Murray, added that Central Securities Depositories (CSDs) should run breach simulations to detect lingering threats, rather than simply patching vulnerabilities and moving on.

Regulatory Shake-Up: Digital Assets Now Under SEC Oversight
The push for stronger digital security comes as Nigeria’s regulatory landscape undergoes its most significant transformation in years. The newly signed ISA 2025 formally recognizes digital assets-including cryptocurrencies and tokenized securities-as regulated financial instruments. This ends years of legal ambiguity and brings all digital asset operators under the direct supervision of the Securities and Exchange Commission (SEC).

Previously, the Central Bank of Nigeria (CBN) had imposed restrictions on crypto-related transactions, and digital asset activities operated in a legal grey area. Now, Virtual Asset Service Providers (VASPs), exchanges, and related platforms must comply with SEC rules, aligning Nigeria’s market with international standards and boosting investor confidence.

ISA 2025 also introduces clearer classifications for securities exchanges, separating them into composite (all asset classes) and non-composite (specialized) categories, making it easier for investors and companies to navigate the market.

Nigeria’s fintech sector continues to evolve rapidly, with regulators balancing innovation and consumer protection. The Central Bank, SEC, and Nigeria Data Protection Commission have all stepped up oversight, especially as AI adoption surges in the industry. Nearly 30% of fintech firms now use generative AI for content creation, and new regulations are being introduced to ensure safe and ethical use of emerging technologies.

Analysts predict that by 2030, fintechs could dominate Nigeria’s lending market unless traditional banks accelerate their digital transformation. Regulatory bodies are expected to develop a comprehensive framework for fintech and digital assets, moving from outright bans to controlled engagement, and possibly introducing incentives for banks investing in advanced technologies.

The message from industry leaders and regulators is clear; innovation and security must go hand in hand to build trust and resilience in Nigeria’s digital financial ecosystem.