Regulation has always played a crucial role in shaping Nigeria’s financial technology sector. Over the past several years, the Central Bank of Nigeria (CBN) has issued multiple frameworks and circulars to guide fintechs in payments, lending and digital banking. From the Payment Service Provider Licensing Guidelines, Regulatory Framework for Open Banking, Risk-Based Cybersecurity Framework, and guidelines on mobile money, international money transfer services, and e-Naira operations, to the recent Guidelines for the Operations of Agent Banking in Nigeria, the CBN has continuously adapted its regulatory tools to reflect the sector’s evolution.
In recent times, the House of Representatives has been considering a bill for the creation of a Nigerian Fintech Regulatory Commission, a new agency that would license, regulate, and supervise all fintech activities in the country. According to the draft proposal, the commission would issue individual or class licenses tied to each firm’s core activity, whether that involves payments, lending or crowdfunding services. It would also set standards on consumer protection, dispute resolution, data usage, and technology performance, and could impose fines or revoke licenses for non-compliance. Proponents argue that this structure will make it harder for bad actors to hide behind jurisdictional gray areas, while giving compliant operators a clearer path to scale.
Beyond licensing and audits, the commission would also serve as an industry arbiter, with powers to compel information, conduct investigations, and mediate disputes between fintechs, banks, and telecom operators. Lawmakers say the body would also be able to intervene on interoperability and access to core infrastructure, a move that could strengthen open banking, curb predatory pricing in digital lending, and improve customer redress for abusive collection tactics. They state that this is necessary because Nigeria’s shift to mobile payments and online credit has accelerated faster than existing watchdogs can monitor, raising concerns about fraud, financial stability, and consumer abuse.
While the proposal is ambitious in scope, it raises several questions about regulatory overlap, operational effectiveness, and institutional coherence. Today, fintechs in Nigeria are already regulated by several agencies — the CBN (for payments, lending, and banking relationships), the Securities and Exchange Commission (SEC) (for investments and crowdfunding), National Information Technology Development Agency (NITDA) (for data governance) and Federal Competition and Consumer Protection Commission (for consumer protection). It begs the question how these compliance frameworks and regulations would be consolidated under one agency, and how fintech companies that belong to existing financial institutions would navigate the maze of regulatory requirements between the CBN and the proposed fintech regulator.
For instance, if a bank establishes a fintech subsidiary, it may be unclear whether the bank would need to obtain both a CBN banking license and a separate fintech license from the new regulatory body. Uncertainty may also arise regarding supervisory authority — specifically, whether the CBN would continue to oversee the bank’s digital lending activities or if that responsibility would shift to the fintech regulator.
The distinction between “banking” and “fintech” is becoming increasingly blurred, as fintech companies now perform many functions traditionally associated with banks, while banks are progressively adopting fintech models. This convergence introduces complex regulatory considerations, particularly regarding the scope of authority of any commission established to oversee technology-based financial services. As technological integration continues and fintech becomes an integral part of mainstream banking, the mandate and relevance of such a commission may require reevaluation to remain effective and aligned with industry realities.
Rather than creating an entirely new bureaucracy, Nigeria could strengthen the CBN’s fintech regulatory capacity, establishing a specialised department or bureau within the CBN to handle digital finance. This approach would ensure consistency, avoid duplication, and retain clear accountability.
Internationally, most major economies have subsumed fintech regulation under existing financial regulators. In the United States, for example, oversight is distributed based on activity: the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) handle consumer protection; the Securities and Exchange Commission (SEC) regulates securities and crowdfunding; the Office of the Comptroller of the Currency (OCC) supervises national banks; and FinCEN oversees anti–money laundering compliance. This activity-based model prevents overlap and leverages each agency’s specific expertise.
Similarly, in the United Kingdom, fintechs are authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) — the latter being an arm of the Bank of England — if they wish to provide regulated financial services. Under the Financial Services and Markets Act 2000 (FSMA), the Payment Services Regulations 2017 (PSRs), and the Electronic Money Regulations 2011 (EMRs), fintechs are integrated into the existing framework rather than separated under a new authority.
The proposed bill for an Act to Provide for the Establishment of Nigerian Fintech Regulatory Commission in Nigeria and for Related Matters (HB.2389) assumes that centralizing fintech oversight will automatically promote innovation, investment, and consumer protection. However, that objective could also effectively be achieved by coordinating existing regulatory mandates, ensuring clarity between agencies, and enhancing inter-agency data sharing and supervision. While the intent behind the proposed commission is notable, the ingenious path may be to reform and empower the CBN and existing agencies with clearer mandates, improved coordination, and modern regulatory tools. Nigeria’s fintech future depends not on the creation of more regulators, but on the development of smarter, adaptive regulation that evolves alongside technological innovation while preserving financial stability and consumer trust.
Chuma Akana is a privacy law expert and a technology law and policy advocate. He is the Founder of Innovation and Tech Lawyers Network. He is a regular speaker and writer on fintech, AI, emerging technologies, and global privacy laws. Chuma is a Tech, Law and Security Program Fellow at the American University, Washington College of Law. He can be reached via c.akana@chestterlaw.com, and is on Linkedin at www.linkedin.com/in/chuma-akana
