CBN's Data Sovereignty Directive Impacts Fintech Firms

Kenneth Ufomba, Managing Director of Signal Alliance, stated that the Central Bank of Nigeria (CBN) has mandated that all fintech companies must host critical financial data within Nigeria by January 1, 2027. This directive will significantly impact fintech firms that have built their operations on cloud-first business models, as they will face complex compliance and migration challenges.

The CBN's directive, issued in June, requires financial institutions, including licensed payment service operators, to store and manage payment transaction data generated within Nigeria on local servers. This move is part of the CBN's efforts to strengthen data sovereignty and enhance cybersecurity regulatory oversight.

Ufomba noted that traditional banks are gradually aligning with these local data requirements, while fintech companies may struggle with compliance hurdles. Collin Onuegbu, Chairman of Signal Alliance, endorsed the CBN's policy, describing data sovereignty as essential for Nigeria's digital future.