Banks seek more time for CBN data localisation

Banks and fintech companies in Nigeria are seeking more time to comply with the Central Bank of Nigeria’s data localisation directive, warning that the January 2027 deadline leaves too little room for the complex migration of large volumes of financial data from overseas cloud environments to local infrastructure.

Industry executives raised the concerns at the recent inaugural GrowthX by Techeconomy and TiLAwards in Lagos, calling for clearer regulatory guidance and a phased implementation of the policy.

The CBN directive requires banks, payment service providers, mobile money operators, switching companies and other licensed participants in the payments industry to ensure that payment transaction data generated in Nigeria is stored and managed within the country.

The policy is aimed at strengthening regulatory oversight, improving data sovereignty and reducing reliance on infrastructure outside Nigeria. But financial-sector technology executives are concerned about the scale of the migration required within the available timeframe.

For institutions operating complex banking and payment systems, localisation involves more than moving databases. It can require changes to cloud architecture, disaster-recovery systems, connectivity, cybersecurity controls and core technology infrastructure while maintaining uninterrupted services for customers.

Chief Technology Officer, FCMB, Blessing Ehize, identified regulatory clarity as one of the industry’s immediate concerns, particularly over which data must be hosted on-premise and what can remain in hybrid-cloud environments.

“To bring payment data back on-premise, for the last three months, we’ve not been able to engage effectively with the Central Bank of Nigeria as the Committee of Bank CIOs to get clarity on these issues,” Ehize told delegates at the event.

According to him, banks need a clearer interpretation of the policy and a structured implementation roadmap. “There’s not been a meeting held to say, ‘This is what it means’ in terms of clarity. So it’s vague,” he added.

Ehize maintained that Nigerian financial institutions have the capacity to undertake the migration but require sufficient time to plan and execute it without creating unnecessary operational risks. “We really have the capacity to do this as a country, but we just need to plan it and not rush the Nigerian way,” he noted.

Deputy Managing Director, eTranzact, Hakeem Adeniji-Adele, also described the six-month timeframe as tight, pointing to the volume of data currently hosted in overseas cloud environments. “I believe it is quite short, simply because of the amount of load that needs to be moved,” Adeniji-Adele remarked.

He proposed a phased approach that would separate compute and storage migration rather than requiring institutions to move all workloads simultaneously. “I feel the solution should be a phased approach. Compute and storage should be divided into two, as opposed to telling everyone to move at once,” he added.

Adeniji-Adele acknowledged that the CBN has been engaging the fintech community but maintained that the volume and complexity of the migration warranted a longer implementation period.

The concerns reflect a broader challenge facing Nigeria’s digital economy: balancing the push for greater control over critical financial data with the need to maintain resilient and reliable digital services.

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The localisation drive is also likely to increase demand for domestic data centres, cloud services, connectivity and backup infrastructure.

Chief Executive Officer, Open Access Data Centre, Dr. Ayotunde Coker, has highlighted the growing importance of local infrastructure as Nigeria’s digital economy expands. He has also pointed to the country’s increasing data-centre capacity and international connectivity as foundations for the next phase of digital development.

However, industry executives argue that additional infrastructure alone will not resolve the immediate compliance challenge. Financial institutions also need reliable power, redundant connectivity, cybersecurity systems and sufficient computing capacity to absorb workloads being moved from international providers.

The timing is particularly significant as digital payments continue to expand across Nigeria.

At the GrowthX event, Founder of Cubed Integrated Consulting and Cyberfore Consulting, David Adeoye Abodunrin, described trust as a critical component of the country’s digital payments infrastructure, arguing that security, resilience and accountability must be incorporated into the design of financial systems.

“Nigeria does not have a payment problem. It has a trust-architecture problem,” Abodunrin declared in his keynote address, titled “Trust by Design: Building Nigeria’s Next Generation of Digital Payments and Infrastructure.”

He proposed a five-layer approach covering secure software development, resilient payment infrastructure, behavioural safeguards, sovereign data practices and shared accountability among banks, fintechs and telecommunications companies.

The data localisation debate therefore extends beyond regulatory compliance. It touches on Nigeria’s ambitions to develop a domestic digital infrastructure capable of supporting financial services, cloud computing, artificial intelligence and other data-intensive industries.

President of the Nigeria Internet Registration Association, Adesola Akinsanya, also stressed the importance of local digital infrastructure, trusted digital identity and skilled talent in converting technology adoption into broader economic value.

“Digital growth is no longer driven by technology alone. It is driven by what happens when technology, people, institutions, and businesses decide to move in the same direction and at the same time and with the same sense of purpose,” Akinsanya noted.

For financial institutions, the immediate priority remains translating the CBN’s localisation objective into a practical migration plan.

Industry executives are seeking clearer technical guidance, additional engagement with the regulator and a phased timetable that allows institutions to migrate critical workloads without compromising the resilience of Nigeria’s payments system.