As Nigeria approaches 2026, the nation’s financial and non-financial sectors face a dynamic risk landscape shaped by evolving geopolitical, economic, and regulatory factors. Insights from DataPro’s in-house experts & analysts underscore the urgency for Nigerian institutions to shift from mere survival tactics to strategic, growth-oriented risk management.

Top Systemic Risks Challenging Nigerian Institutions

 DataPro’s in-house experts & analysts highlight five systemic risks that will dominate Nigeria’s risk landscape in 2026:

1. Foreign Exchange Volatility: Sudden shocks in FX rates remain the leading threat to banks’ capital adequacy, with the potential to trigger liquidity crises and erode loan portfolios heavily reliant on foreign currency funding. Robust stress testing and scenario planning around Naira devaluation and foreign credit line restrictions are essential.
2. Cybersecurity and AI Threats: Emerging technologies like AI are a double-edged sword. While offering operational efficiencies, they also expose institutions to sophisticated fraud and cyberattacks. A catastrophic cyber breach could freeze core banking systems, leading to massive retail deposit withdrawals—a ‘Black Swan’ event Nigerian banks must urgently prepare for.
3. Regulatory Intensification: The combined effect of recapitalisation efforts and Basel III reforms will pressure weaker banks to consolidate or exit the market. Revised Internal Capital Adequacy Assessment Process (ICAAP) guidelines demand enhanced risk modelling and higher capital buffers, pushing institutions to elevate governance and risk management standards.
4. Talent Flight: The loss of mid-level risk management professionals to foreign markets creates a governance vacuum. Retaining skilled personnel and developing internal risk capacity are critical strategic priorities to maintain compliance and operational resilience.
5. Climate Transition Risks: Climate change threatens collateral values in sectors like real estate and agriculture, with physical risks such as flooding damaging collateralised assets and transition risks like carbon border taxes squeezing oil producers’ margins, thereby impacting loan repayments.

Evolving Risk Reporting and Enterprise Risk Management (ERM)

Risk reporting is rapidly evolving from retrospective data analysis to real-time and predictive insights. Regulators now demand forward-looking risk assessments that incorporate emerging and market risks, driving transparency and resilience. Automation and RegTech solutions are becoming key enablers in this transformation, helping institutions comply with complex regulatory requirements efficiently.

While financial institutions in Nigeria generally show moderate to advanced ERM maturity—guided by frameworks such as COSO ERM and ISO 31000—the adoption remains uneven in non-financial sectors, especially among SMEs. Challenges such as inconsistent data quality and regulatory complexities persist but are being addressed through increased digital tool adoption and governance reforms.

Digital Transformation and Future Trends

Digital technologies like cloud computing, AI, and blockchain are revolutionising risk identification and reporting. Institutions leveraging big data and predictive analytics can anticipate and mitigate risks more proactively, enhancing overall risk governance.

Environmental, Social, and Governance (ESG) factors are also becoming integral to risk frameworks. Incorporating ESG principles not only ensures compliance with emerging regulations but also builds stakeholder trust and supports sustainable growth.

Opportunities and Challenges Ahead

Opportunities:

• Advanced data analytics and AI-driven risk management tools.
• Regulatory support encouraging transparency and robust ERM frameworks.
• Cross-sector collaboration for risk intelligence sharing.
• Growing ESG integration is enhancing holistic risk assessment.

Challenges:

• Variability in risk reporting standards hindering comparability.
• Limited availability of skilled risk professionals.
• Technology infrastructure gaps slowing real-time risk monitoring.
• Organisational resistance to change impeding ERM adoption.

Nigeria’s 2026 risk landscape presents a complex interplay of geopolitical uncertainties, economic pressures, technological threats, and regulatory demands. Institutions must move decisively toward strategic risk management, leveraging advanced analytics and fostering a culture of proactive governance.

By embracing a ‘Smart Growth’ approach, Nigerian banks and corporations can navigate emerging risks, protect capital, and seize growth opportunities in an increasingly unpredictable environment.