Nigeria’s Central Bank (CBN) has issued a new directive requiring commercial banks to secure regulatory approval before making changes to their core banking applications. This move comes in response to significant disruptions caused by recent technology upgrades at several major banks, which have left numerous customers unable to access their banking services.
Since mid-2024, at least four banks have updated their core banking systems, citing the need for cost reduction and customization. However, these changes have led to widespread complaints from customers, many of whom have taken to social media to voice their frustrations.
The CBN’s intervention reflects growing concerns over the increasing volume of customer grievances. According to sources familiar with the situation, the regulator is responding to public dissatisfaction and aims to uphold consumer protection standards.
“The CBN isn’t happy with how customers have been complaining about banks in the past couple of months. That’s why it is stepping in,” one insider noted.
This directive aligns with the CBN’s role as a consumer protection authority. Earlier in 2024, the bank had released a revised draft of its 2019 consumer protection regulations, underscoring its commitment to safeguarding customer interests.
Despite this proactive stance, some banking experts and consumers have expressed disappointment over the CBN’s delayed response to the ongoing issues. There is speculation that the regulator may impose penalties, similar to actions taken in other countries where banks have faced fines for mishandling system upgrades. For instance, in 2012, the Royal Bank of Scotland was fined £56 million after a faulty system update left over six million customers without access to their accounts.
“I am still surprised that the CBN hasn’t taken regulatory action against any other banks. They should have fined them,” remarked one expert, who preferred to remain anonymous.
One reason cited for the CBN’s delay in intervention may be the absence of a specific regulatory framework governing core banking platform modifications. The new directive aims to address this gap and ensure a more structured approach to such critical changes.
As banks navigate the complexities of their technology systems, the CBN’s directive is poised to impose stricter oversight, ensuring that customer interests are prioritized in future software changes.
