- Nigeria’s Central Bank (CBN) has directed commercial banks to secure regulatory approval before altering their core banking system, according to insider sources quoted by TechCabal.
- This directive aims to mitigate the disruption caused by recent technology changes, as several major banks have shifted to new core banking systems in the past year.
- However, these shifts, motivated by the need for cost reduction and greater customisation, have left millions of customers facing restricted access to banking services, a frustration they’ve voiced widely across social media.
At least four major commercial banks in Nigeria began changing their core banking platforms in mid-2024, a move that, despite promises of service improvements, has backfired, with outages and system delays sparking public dissatisfaction.
Although banks are working to address these disruptions, the CBN’s directive intensifies pressure, placing added regulatory scrutiny on institutions that fail to meet service expectations.
A source close to the CBN remarked that the CBN is aware of the uptick in customer complaints and finds the situation concerning, which is why they are stepping in now.
The CBN’s latest intervention aligns with its role as a regulatory body tasked with safeguarding consumer interests, a priority underscored by its revised draft consumer protection regulations introduced in early 2024.
The regulatory move has, however, sparked mixed reactions. Some experts and consumers are critical of the CBN’s delayed response, arguing that penalties, such as fines, could have been more effective in curbing disruptions.
“The regulator should have imposed fines on these banks by now,” one banking expert who preferred anonymity was quoted as saying. This expert argued that timely regulatory action could have pressured banks to prioritise system reliability before implementing large-scale changes.
Some industry insiders believe the CBN's response was delayed due to the lack of an established regulatory framework addressing core banking software changes.
With this new directive, the CBN seeks to introduce a more structured approach to supervising technological updates that affect consumer access to banking services.
The updated policy is anticipated to provide clearer guidelines for banks while enhancing consumer protection amidst evolving technology in the financial sector.
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