Effect of Cyber Security Threats on Bank Stability in Nigeria

Abstract

objective of the research work is to determine the impact of cyber security investments expenditure, fraud incidences and bank size variables on financial stability of Nigerian banks as measured using the Z-score. The study adopts a quantitative research design using panel data from 10 listed banks in Nigeria for the period 2014-2023. Data were analyzed by random effects regression, and to establish the correct model the Hausman test was performed. The results show that cyber security investment has significant positive effect on bank stability, and cyber security attacks, ATM fraud and cyber fraud have significant negative effect on stability. Interestingly, mobile fraud was positively correlated with stability, probably because banks experiencing higher fraud had put greater fraud prevention measures into place. Bank size was found not to have a significant influence on stability. Based on these findings, the study recommends that Nigerian banks invest more in cyber security, intensify regulatory measures and improve the education of the public on fraud prevention. In addition, banks should work together to share cyber security best practices and threat intelligence, which can help to create a more resilient financial system. These initiatives will contribute to reducing risks, building consumer confidence and providing a stable environment for banks in the long run.

Keywords:       Cyber security threats, bank stability, fraud prevention, Nigeria, financial resilience.