CBN directs commercial banks to secure approval before changing core banking application 

Nigeria’s Central Bank (CBN) has directed commercial banks to get regulatory approval before changing their core banking software, according to two people familiar with the matter. The directive is in response to the impact of the ongoing technology changes by some of the country’s biggest banks. 

Since the second half of 2024, at least four commercial banks have changed their core banking applications. Those changes, driven by costs and a need for customisation, have left millions of customers unable to access banking services. Many of those customers have shared their complaints on social media platforms. 

While these banks say they’re working to resolve the issues, the regulator’s intervention will intensify the pressure on them. 

“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 of those people said.

The CBN’s directive is consistent with its responsibility to protect customers as the regulator, another person familiar with the matter said. In February 2024, the CBN released a revised draft of the reviewed 2019 consumer protection regulations.

Yet banking experts and customers have questioned the regulator’s long silence over the issue, with some expecting the regulator to fine the banks like in other climes. In 2012, Royal Bank of Scotland (RBS) was fined  £56m after a botched system upgrade left over 6 million customers unable to access their accounts.

“I am still surprised that the CBN hasn’t taken regulatory action against any other banks. They should have fined them,” said one banking expert who asked not to be named. 

One theory is that the delay in the CBN’s intervention was due to the absence of a specific regulatory framework for core banking platform changes, one person familiar with the matter said. The new directive hopes to fix that.