Nigeria’s CBN Enforces Approval Requirement for Core Banking System Changes to Minimize Service Disruptions

In response to recent customer frustrations over technological disruptions, the Central Bank of Nigeria (CBN) has issued a new directive mandating that commercial banks obtain regulatory approval before making changes to their core banking systems. This move is intended to reduce service interruptions associated with the transition to new core banking platforms, a shift that several major Nigerian banks have undertaken over the past year.

The directive comes after widespread customer dissatisfaction, as millions of Nigerians experienced restricted access to banking services due to outages and delays during these system upgrades. Since mid-2024, at least four of Nigeria’s leading commercial banks have begun overhauling their core banking systems to lower operational costs and enable better customization. However, these changes have led to prolonged service outages, sparking a wave of complaints on social media.

While banks continue working to resolve these technical issues, the CBN’s directive introduces additional regulatory oversight, emphasizing that financial institutions must uphold service standards or face increased scrutiny. An insider mentioned that the CBN is particularly concerned about the growing volume of customer grievances, which prompted this intervention.

This action aligns with the CBN’s mandate to protect consumer rights, building on updated consumer protection regulations released earlier this year. While many consumers and industry experts welcome the new policy, some have criticized the timing, suggesting that prompt penalties could have incentivized banks to prioritize system stability before implementing disruptive upgrades. One banking expert noted that earlier regulatory action might have compelled banks to focus on service continuity, adding that the delay may have resulted from a lack of clear guidelines for core banking software changes.

With this directive, the CBN aims to establish a structured approach to overseeing technological upgrades, ensuring that future system transitions prioritize consumer access and service reliability. By setting clearer expectations, the CBN reinforces its commitment to consumer protection, supporting a smoother adaptation to new technological demands within Nigeria’s financial sector.