Nigeria’s CBN Steps Up New Directive, Mandates Regulatory Approval For Core Banking System Changes

In a recent move to address customer frustrations stemming from technological disruptions, Nigeria’s Central Bank (CBN) has issued a directive requiring commercial banks to secure regulatory approval before modifying their core banking systems. This decision aims to reduce the disruptions associated with the recent shift to new core banking platforms, which several major banks have undertaken over the past year.

The directive follows significant customer backlash after millions experienced restricted access to banking services, largely due to system outages and delays during these transitions. Since mid-2024, at least four leading commercial banks in Nigeria have begun overhauling their core banking systems to cut costs and introduce greater customization. However, these upgrades have led to prolonged outages, sparking widespread discontent on social media.

While banks work to resolve these technical issues, the CBN’s directive adds regulatory pressure, emphasizing that institutions must meet service expectations or face closer scrutiny. An insider revealed that the CBN is aware of the uptick in customer complaints, expressing concern over the growing number of grievances that led to this latest intervention.

The CBN’s action aligns with its consumer protection mandate, as highlighted by its updated consumer protection regulations introduced earlier this year. Although some consumers and experts welcome the new policy, others have criticized the CBN’s delayed response, suggesting that timely penalties could have deterred banks from implementing disruptive changes. One anonymous banking expert argued that earlier fines might have compelled banks to prioritize system stability before rolling out extensive upgrades. The expert noted that the delay may have stemmed from the absence of a clear regulatory framework around core banking software changes.

With the new directive in place, the CBN aims to bring greater structure to the oversight of technological updates, ensuring that future transitions prioritize consumer access and service reliability. The policy is expected to set clearer guidelines for banks, reinforcing consumer protection as the financial sector adapts to new technological demands.