Nigerian banks and fintechs are increasingly under pressure to localize their payment transaction data to meet the Central Bank of Nigeria’s (CBN) compliance date of January 1, 2027.
This comes as the directive requires regulated financial institutions to store and process payment data generated in Nigeria locally. This has raised concerns for those that have heavily relied on cloud based services and data centres.
The News Chronicle reports that a joint survey by the CBN and NITDA found that only 59 per cent of financial institutions were ready to meet the deadline, highlighting the scale of the transition required.
The CBN says the directive will make the financial system more stable, protect sensitive data and give regulators better access to critical transaction data.
Operators however warn that the directive goes beyond just storing information on servers in Nigeria. They will have to review their technology infrastructure, contractual obligations, security and application dependencies to ensure services remain uninterrupted.
Smaller fintechs and microfinance banks are especially concerned about the cost and complexity of the directive.
Meanwhile, an expert in the industry said localisation should cover both data storage and processing, arguing that it would reduce exposure to foreign legal jurisdictions and improve transaction performance.
Rack Centre CEO Lars Johannisson has urged institutions facing difficulties to engage the CBN and NITDA early for clarification and guidance.
The CBN has warned that institutions that deliberately fail to comply could face sanctions, making the coming weeks critical for financial operators preparing for the new requirements.
