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UBA CEO Warns Banks: AI Without Risk Control Could Expose Financial Institutions

The Group Managing Director and Chief Executive Officer of United Bank for Africa (United Bank for Africa), Oliver Alawuba, has warned Nigerian banks against rushing into artificial intelligence adoption without fully understanding the risks involved.

He delivered the warning at the 64th quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), hosted by UBA, with a focus on “Internal Audit Function in the AI Era.”

Alawuba, represented by Ugo Nwaghodoh, UBA’s Executive Director for Finance and Risk Management, said AI is transforming banking operations but also creating new and faster forms of risk.

AI Is Reshaping Banking at High Speed

Alawuba explained that banks now operate in an environment where algorithms can approve or reject transactions in milliseconds.

He said AI systems already influence credit decisions, fraud detection, compliance alerts, and customer profiling with minimal human input.

According to him, this speed improves efficiency but also increases exposure to hidden system failures, bias, and automation-driven fraud.

Cyber Threats and Fraud Risks Are Scaling Faster

The UBA CEO warned that cybercriminals now use AI to scale attacks across financial systems.

He showed emerging threats such as:

automated cyberattacks
deepfake identity manipulation
large-scale fraud automation
data exploitation risks

He said these risks evolve faster than traditional banking controls can respond.

Alawuba also stressed that AI errors in financial models can trigger regulatory breaches, reputational damage, and financial losses before institutions even detect them.

Banks Must Build AI Understanding Before Adoption

Alawuba said banks cannot safely deploy AI systems without technical understanding.

He stated clearly that internal audit teams must strengthen capacity in:

machine learning systems
data governance
cloud infrastructure
cyber risk management
digital identity systems
model risk assessment

He warned that weak understanding creates blind spots in oversight.

In his words, institutions cannot effectively audit systems they do not understand.

Independence and Control Must Remain Central

The UBA CEO cautioned banks against allowing innovation pressure to override risk control.

He said internal audit teams must remain independent even as banks push for faster digital transformation.

He added that speed without governance creates structural vulnerability, and innovation without control becomes a liability.

He called for stronger collaboration between audit, compliance, risk management, technology, and business units to manage AI-related risks effectively.

Cybersecurity Now a Core Banking Priority

Also speaking at the event, ACAEBIN Chairperson Aina Amah warned that cybercrime remains one of the biggest threats to the banking sector.

She said attackers constantly adapt their methods to exploit weaknesses, regardless of existing controls.

Amah urged banks to:

strengthen cybersecurity systems
invest in fraud detection tools
improve real-time monitoring
collaborate across institutions
work more closely with law enforcement

She added that several banks have already deployed enterprise fraud monitoring systems and created dedicated units to track suspicious transactions in real time.

What This Means for Nigerian Banking

The message from both UBA leadership and industry auditors signals a shift in how Nigerian banks must approach digital transformation.

AI adoption is no longer just a technology decision. It is now a governance, risk, and compliance issue.

Banks that fail to build internal capacity and control systems may face higher exposure to cybercrime, regulatory penalties, and operational failures as AI integration accelerates across the sector.

Expert View

Financial technology and risk analysts say UBA’s warning reflects a growing concern across global banking systems: AI adoption is moving faster than regulatory and internal control frameworks.

According to a banking risk analyst, the real issue is not AI itself, but poor implementation:

“Banks are rushing into automation for efficiency, but many are not investing enough in model validation and governance. That creates blind spots that cybercriminals can exploit.”

Another cybersecurity expert noted that AI increases both defensive and offensive capabilities:

“While banks use AI to detect fraud, attackers also use it to mimic identities, automate phishing, and bypass traditional security filters. It becomes an arms race.”

Experts agree that Nigerian banks must prioritize AI literacy, internal audit strength, and cross-institution collaboration before scaling advanced AI systems.