By Nathaniel Zaccheaus, Abuja
The Senate on Thursday declared that Nigeria’s fast-growing fintech industry has reached a level where some technology-driven financial platforms now pose potential threats to national stability, warning that the absence of a clear legal framework for their supervision exposes the country to avoidable systemic risks.
This alarm formed the core of the debate on a bill seeking to amend the Banks and Other Financial Institutions Act (BOFIA) 2020, sponsored by Senator Mukhail Adetokunbo Abiru and co-sponsored by members of the Senate Committee on Banking, Insurance and Other Financial Institutions.
The proposed legislation aims to give the Central Bank of Nigeria (CBN) explicit statutory powers to designate, register, and closely supervise Systemically Important Institutions (SIIs), including non-bank digital financial service providers whose platforms have become integral to Nigeria’s economic stability.
Leading the debate, Abiru noted that the structure of Nigeria’s financial system has fundamentally changed, with mobile money operators, switching and settlement firms, digital lenders, payment service banks, and wallet providers now serving tens of millions of citizens and processing billions of naira in transactions daily.
He warned that many of these firms control vast stores of behavioural and financial data, yet operate under legal frameworks that no longer reflect their influence, interconnectedness or market dominance.
“Some fintechs now operate at scales that rival mid-sized banks. Their data holdings carry national security implications, yet we cannot say with certainty where all such data is stored or who has access to it,” Abiru said.
He stressed that some of the digital firms operate through foreign-owned structures, utilise offshore servers, or maintain opaque beneficial ownership arrangements that weaken regulatory oversight.
The senator cited the April 2024 onboarding suspension placed on several fintech firms over KYC and AML deficiencies as evidence that “the scale of these institutions has outgrown existing regulatory tools.”
To close these gaps, the amendment proposes five major reforms: granting legal recognition for identifying fintechs as SIIs; establishing a national registry to improve traceability and beneficial ownership disclosure; empowering the CBN with prudential tools suited to digital institutions; strengthening data sovereignty; and enhancing consumer protection and systemic resilience.
Abiru dismissed calls for a new, standalone fintech regulatory authority, arguing that it would only lead to duplication and regulatory fragmentation.
He said global best practices favour centralised oversight within the central bank, complemented by stronger coordination with agencies such as the SEC, NCC, NITDA, CAC, FCCPC and the Office of the National Security Adviser.
Adding a social and economic dimension to the discussion, Senator Natasha Akpoti-Uduaghan highlighted growing inequalities affecting young Nigerians who earn income from global digital platforms.
She pointed to what she described as “huge discrepancies” in payments to Nigerian creators on platforms like Facebook, sometimes as low as 50 cents per 1,000 views, compared to the $10 to $30 paid to creators in the United States for similar content.
She warned that such disparities undermine financial inclusion and limit the earning capacity of Nigeria’s expanding community of digital entrepreneurs, urging more robust engagement with international technology companies to safeguard local creators.
The bill, which sailed through second reading, has been referred to the Senate Committee on Banking, Insurance and Other Financial Institutions for further legislative scrutiny.
