CYBER SECURITY RISK DISCLOSURE QUALITY AND ITS EFFECT ON INVESTOR CONFIDENCE IN NIGERIA'S FINANCIAL INSTITUTION

Abstract

The paper focuses on investigating the practice of cybersecurity risk disclosure by financial institutions in Nigeria and the effect on investor confidence. The study also assesses the extent and standard of the disclosure, the elements affecting it, and the relationship between standard and confidence. As the study adopted a qualitative approach, it relied on secondary sources of data such as annual reports, ESG disclosures, regulatory documents, and literature. The thematic analysis conducted on governance matters, reporting of incidents, investment in infrastructure, awareness among customers, and transparency helped to assess the inter-linkages between disclosure and confidence of investors. The result shows a higher percentage (62%) of cybersecurity risk disclosure by multinational banks compared to indigenous banks (37%), which is largely due to the influence of global governance systems. The importance of cybersecurity risk disclosure is viewed by stakeholders, with priority considerations on governance (71%), reporting (65%), infrastructure (54%), and awareness (48%). Other important considerations are high implementation costs (67%), a shortage of qualified personnel (58%), inadequate regulatory support (53%), and low awareness (45%). Perceived assessments by the stakeholders indicate increased perceptions on trust (39%), risk management (37%), and investment (40%) due to high-quality cybersecurity risk disclosure. High-quality disclosure has a positive influence on 57% of stakeholders, and low-quality disclosure has a negative influence on 50%. Transparent and effective cybersecurity risk disclosure is very important to improve investor trust, operational resilience, investment decisions, and stability within the digital financial ecosystem of Nigeria.