Experts are urging stricter measures to improve the safety of digital trading and settlement platforms in Nigeria’s financial markets, recommending innovations such as advanced reCAPTCHA’s and ‘zero trust security’ models.
This was highlighted at the recent African and Middle East Depositories Association (AMEDA) 2025 conference, held on the 25th of April 2025, hosted by the Central Securities Clearing System (CSCS) PLC in Lagos, Nigeria.
When discussing how to create a resilient trading and settlement environment in Nigerian and African markets, Stuart Turner, CEO of Avenir Technology Limited, stated:
“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.”
He further suggested that systems designed to slow down imposters, like the zero-security model, along with advanced reCAPTCHA technologies, can help prevent unauthorized access to databases.
“Now there are reCAPTCHA technologies that detect imposters based on human behaviors, such as how they input passwords,” he said.
In terms of preparing for potential disruptions and breaches, Jim Micklethwaite, Managing Director of Financial Markets at Thomas Murray, stated:
“Central Securities Depositories (CSDs) should run simulations to identify lingering actors who gain access to a system after breaches, rather than just repairing the issues and moving on.”
ReCAPTCHA vulnerability
According to a report from researchers at ETH Zurich, artificial intelligence (AI) can now bypass Google’s reCAPTCHA v2 human verification system with 100% accuracy.
The researchers found that modern AI models could also exploit cookies and browser history, which reCAPTCHA v2 relies on, allowing them to infiltrate databases.
- They modified the You Only Look Once (YOLO) object detection model to recognize common objects in reCAPTCHA v2, such as cars, bridges, and traffic lights.
- After training the model on thousands of images, they successfully breached Google’s human-testing reCAPTCHA v2, which requires users to click on designated images.
At the AMEDA conference, experts advised Central Securities Depositories (CSDs) in Africa to use stronger security measures, like improved reCAPTCHA systems that track user behavior, to better protect their trading and settlement processes.
Nigeria’s CSD
Nigeria’s Central Securities Clearing System (CSCS) functions as the country’s Central Securities Depository (CSD), handling the records of securities traded in the Nigerian Capital Market.
- CSCS maintains an electronic, book-entry record of securities such as shares, unitized funds, bonds, and treasury bills, facilitating their storage and transfer during transactions.
- This system aims to prevent issues like certificate duplication, forgery, and loss, which can lead to unauthorized sales and a lack of transparency.
- It converts all securities certificates to an electronic format for basic monitoring and management.
