The Senate on Thursday began debate on a bill seeking to amend the Banks and Other Financial Institutions Act (BOFIA) 2020 to empower the Central Bank of Nigeria (CBN) to designate and supervise systemically important non-bank financial institutions, particularly major fintech operators whose activities now constitute critical national infrastructure.

Leading the debate, Tokunbo Abiru, the sponsor of the bill and Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, said the amendment had become urgent due to the rapid transformation of Nigeria’s financial ecosystem and the emergence of large technology-enabled service providers operating at a scale previously unseen in the country.

Abiru noted that fintechs such as mobile money operators, payment service banks, wallet providers, digital lenders and switching companies now serve tens of millions of Nigerians, process huge daily transaction volumes and hold vast pools of sensitive financial data, yet operate within a regulatory framework that has not fully evolved to match their systemic importance...TAP TO CONTINUE FULL READING.

“The reality today is that a non-bank institution, because of its market dominance, data concentration, customer reach or technological capacity, may pose risks equal to or even greater than those posed by a traditional bank,” Abiru said.

“We are therefore confronted with a regulatory gap that leaves critical parts of the financial system operating outside the highest tier of statutory oversight. This bill seeks to correct that mischief.”

He warned that without modernising BOFIA, the country risked exposing itself to data insecurity, foreign control of sensitive financial infrastructure and vulnerabilities that could undermine national security.

The senator stressed that many fintechs operate across foreign-owned networks, store customer data offshore, or use cloud systems outside regulatory reach, raising concerns around data sovereignty.

“Today, we cannot say with certainty where all the financial and behavioural data processed by some of these institutions is stored, who has access to it, or which foreign jurisdictions may lay claim to it,” he said.

Abiru recalled the temporary CBN restriction on fintech onboarding in April 2024, following issues around KYC compliance, money-laundering red flags and suspicious transactions, a development that, he said, demonstrated the limitations of existing regulatory tools.

The amendment bill proposes five key objectives, including establishing a statutory framework for designating systemically important institutions, creating a national registry of fintechs, empowering the CBN to impose enhanced supervisory requirements, strengthening data sovereignty, and improving consumer protection.

He dismissed suggestions that a new regulatory agency should be created for fintech oversight, arguing that such duplication would fragment regulation and undermine efficiency.

“Fintech regulation is deeply intertwined with monetary policy, payments oversight, prudential supervision, and systemic-risk monitoring, functions that already reside naturally within the Central Bank,” he said.

“International best practice overwhelmingly favours integrating fintech oversight within existing regulators, not creating new bureaucracies.”

Abiru urged the Senate to support the bill, which carries no financial implications under Senate rules.

Contributing to the debate, Adams Oshiomhole, former President of the Nigerian Labour Congress (NLC), shared the experience of how his accounts were once hacked, disclosing that the hackers accessed him through one of the Fintech banks.

Oshiomhole also said the identities of most of the key owners of online operators were not known and might not be held accountable for infractions since there was no law binding them to any commitments.

“I know the directors of our regular banks, but I can’t say the same of these Fintech banks.

“I don’t know the directors of MoniePoint, Opay and all others”, he added.

Oshiomhole further argued that when properly regulated through an enabling law, the operations of online financial institutions would better serve the interest of Nigerians.

Senators unanimously passed the bill for second reading and referred it to its Committee on Banking, Insurance and Other Financial Institutions for more legislative work.