CBN mandates local data storage rules for banks, fintechs in Nigeria

The Central Bank of Nigeria is moving to tighten oversight of the country’s fast-growing digital payments industry with new rules on data storage, ownership disclosure, and market structure.

The policy is aimed at strengthening supervision as electronic transactions expand across Africa’s largest economy. 

In a circular issued Monday by the Central Bank of Nigeria Payments System Supervision Department, banks, fintech companies, mobile money operators, and other licensed payment providers were directed to store all transaction data generated in Nigeria on local servers starting Jan. 1, 2027. 

The regulator said the step is intended to improve control over financial data and reduce reliance on offshore infrastructure.

It also reflects growing global attention on data localization as governments seek greater oversight of sensitive digital financial systems. 

Nigeria’s payments sector has expanded rapidly in recent years, driven by mobile banking, fintech adoption, and wider access to digital financial services.

The growth has improved efficiency and financial inclusion, but it has also raised concerns about market concentration, ownership transparency, and operational risks. 

The new directive introduces a broader regulatory package designed to address those concerns while reinforcing stability in the payments ecosystem.

Data to remain within Nigeria 

Under the new rules, all transaction data generated within Nigeria must be stored and managed locally in line with applicable data protection laws.

The CBN said the requirement is designed to ensure sensitive payment information remains within its jurisdiction. 

The policy will take effect in 2027, giving financial institutions time to adjust their systems and infrastructure.

The regulator said it will monitor compliance closely as part of its wider supervisory framework.

Ownership disclosure requirements 

The CBN also directed financial institutions to disclose and maintain accurate records of ultimate beneficial ownership.

The aim is to improve transparency across the banking and fintech sectors and strengthen anti-money laundering controls. 

Institutions will be required to make ownership information available to regulators upon request.

The CBN said the rule aligns with existing anti-money laundering and counter-terrorism financing standards.

Market structure and competition rules 

To curb concentration risks, the regulator introduced limits on market dominance in card issuance and merchant acquiring services.

Firms with more than 25% share in one segment will be capped at 15% in tcfhe other. 

Operators must submit monthly market share reports and fully comply with the new structure by Dec. 31, 2026.

The CBN said enforcement actions, including sanctions, will be applied where necessary to ensure compliance and protect competition in Nigeria’s payments industry.