The Central Bank of Nigeria's push for strict data localization is expected to disproportionately impact fintech companies compared to traditional commercial banks, according to industry analysis.
SATH's managing director highlighted that the regulatory framework creates a heavier operational burden for digital-first firms, which lack the existing infrastructure of legacy banks.
This divergence in compliance costs could reshape the competitive landscape in Nigeria's financial sector.
While established banks can absorb the expense of localizing data centers within their current operations, fintechs face significant capital expenditure requirements to meet the new standards.
The policy effectively raises the barrier to entry for smaller digital lenders and payment processors.
The move comes as the CBN continues to tighten oversight on the financial sector.