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Home » Articles » Digital Disruption in the Banking and Financial Sector: Creating a Sustainable Framework – Fathia Olamiji Adetola

Digital Disruption in the Banking and Financial Sector: Creating a Sustainable Framework – Fathia Olamiji Adetola

Digital Disruption in the Banking and Financial Sector: Creating a Sustainable Framework for the Future of Banking in Nigeria


In August 2023, Akeem Lawal, the Managing Director of Payment Processing & Switching at Interswitch Purepay, reported an astounding 86% growth within the span of the last six months, underscoring the sector’s expanding influence within the nation.1 The rapidly changing financial services industry, driven by new technology, is transforming the market.

What was once an infant sector, the Nigerian Financial Technology (FinTech) industry has since evolved into a prominent force within the African financial landscape.2 Given these impressive developments and the ongoing transformation within this sector, there arises a compelling necessity for legal intervention. This article highlights legal regulation’s vital role in the industry, stressing integrity, compliance with banking laws, and preventing infractions. Digital Disruption in the Banking Industry: An Overview.

Traditionally under the Nigerian banking landscape, branches and tellers, serve as the cornerstone of the nation’s financial system.3 However, it is not without its flaws as the system burdens customers with mounting expenses.4

As such, a notable shift is occurring, as banks move from traditional to digital services. This change is gaining traction, prompting financial institutions to adopt new technologies for competitiveness and utilize data analytics and AI for improved customer services.5 Prominent examples of digital disruption span the fintech landscape, encompassing online payments, digital banking, alternative funding, insurtech, blockchain technology, and digital currencies. All these facets have exerted substantial influence over the banking sector, shaping its future landscape.

Navigating the Legal Terrain Amidst Digital Disruption: Establishing a Sustainable Framework

Renowned legal scholar Lester Lawrence Lessig III once proclaimed in his article “Code is Law” that the design of digital technologies carries immense influence over society, yielding both promising opportunities and formidable challenges.

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Within this context, these disruptions not only redefine established business paradigms,6 they simultaneously open the gates to cyber threats, data breaches, and financial malfeasance.7

A startling revelation from a November 2022 Businessday article8 exposed a staggering 178% surge in cyberattacks in the nation.

This vividly underscores the pressing need for a sustainable framework to navigate the evolving terrain of banking in Nigeria. Without a robust legal framework and effective compliance mechanisms, unscrupulous individuals could exploit the nascent digital services with impunity.

Recognizing this, the National Assembly has expanded its purview to encompass the banking and finance sector,9 embracing the technological innovations propelling the industry forward.

In pursuit of a more adaptable and responsive regulatory environment, the Central Bank of Nigeria’s scope of authority has expanded to include the regulation of technological innovations within the sector, with a vision of establishing a framework that is not only apt for the present but also sustainable in the long run. They devised a spectrum of guidelines with the overarching objective of safeguarding the stability of the financial system. These guidelines encompass a wide array of functions, including the regulation of mobile money services and electronic wallet operators,10) the establishment of conformity standards for switching companies operating in the nation,11 oversight of payment services providers (PSPs) and other payment facilitators,12 and the establishment of minimum operational standards for electronic payment services.13 Each of these guidelines addresses specific aspects of the evolving financial landscape, ensuring a comprehensive regulatory approach.14

One of Nigeria’s notable regulatory innovations is the “regulatory sandbox.” This platform encourages experimentation while providing guidance for regulatory frameworks to adapt to emerging technologies.15 Launched on January 25, 2023, this initiative, embraced by over 50 nations, showcases Nigeria’s dedication to creating a sustainable digital disruption framework in finance. Tailored to its needs, it joins a lineup of innovative regulatory measures.


In conclusion, the surge in demand for digital financial services in Nigeria reflects the confluence of technological advancements and evolving consumer preferences, charting a new course for the country’s banking sector (Carstens 2018, FSB 2019). With the global banking landscape undergoing a tech-driven transformation, regulatory bodies must swiftly adapt to remain relevant in this ever-changing landscape.16

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To establish a sustainable framework for digital banking in Nigeria, it’s crucial for the government and regulatory authorities to strike a delicate balance. This equilibrium should encourage innovation while concurrently safeguarding the interests of consumers and the financial system.7

This approach not only ensures the stability of the banking industry but also positions Nigeria as a progressive contender in the global fintech arena.17

In essence, it’s a strategic imperative to embrace digital disruption and steer it toward a prosperous and secure future for banking in Nigeria.18

Image Credit: Nairametrics

About Author

Fathia Olamiji Adetola, a final-year law student at Lagos State University, is a distinguished legal writer, accomplished public speaker, and dedicated tutor. With multiple awards to her credit, she has a particular focus on Alternative Dispute Resolution, Intellectual Property Law, and Financial Technology.
For further communication, you can reach her at [email protected].
Connect with Fathia on LinkedIn: Fathia Adetola.

  1. Justus Adejumoh, ‘Nigeria Recorded over 86% Growth Digital Transactions in 1H 2023 – Expert’ (Independent.ng3 August 2023) < 1h-2023/> accessed 26 August 2023. []
  2. Nwafor, ‘FINTECH NIGERIA: Digital Payment Users May Hit 146.10m in 2027’ (Vanguard NewsJune 2023) <> accessed 26 August 2023. []
  3. Nicholas Idoko, ‘The Shift from Traditional Banking in Nigeria’ (Professions in Nigeria29 June 2023) <> accessed 29 August 2023. []
  4. In addition, although they provide in-person service, problem-solving can be slow and bureaucratic. Plus, traditional banks have limited operating hours, forcing customers to rely on online support or wait until the next business day. []
  5. HP Singh, ‘How Digitization Is Shaping the Future of Banking’ (Times of India Blog18 March 2023) <> accessed 29 August 2023. []
  6. ‘The Impact of Fintech on Financial Inclusion in Nigeria – Vazi Legal’ (Vazi Legal5 February 2023) <,network%20coverage%20in%20those%20ar eas.> accessed 26 August 2023. []
  7. ‘Mitigating Digitisation Risks in Banking Sector – THISDAYLIVE’ (Thisdaylive.com2021) <> accessed 1 September 2023. [] []
  8. BusinessDay, ‘Nigeria Recorded a 174% Increase in Cybercrimes in Six Months, Here’s Why You Should Be Bothered’ (Businessday NG18 November 2022) < increase-in-cybercrimes-in-six-months-heres-why-you-should-be- bothered/#:~:text=In%20Africa%2C%20the%20peril%20of,reported%20on%20August%203%2C%202022.> accessed 1 September 2023. []
  9. These legislations, such as the Banking and Other Financial Institutions Act of 2020, the CBN Act, the Investments and Securities Act, the Nigeria Communication Act, the Patent and Designs Act, the Anti-Money Laundering Regulations of 2013, the Foreign Exchange Monitoring and Miscellaneous Provisions Act, the Federal Competition and Consumer Protection Act, and the Money Lenders’ Act, collectively serve to regulate technological innovations within the banking and financial industry. []
  10. CBN Guidelines on Mobile Money Services in Nigeria 2021 (the “Mobile Money Guidelines” []
  11. Guidelines on Transaction Switching in Nigeria []
  12. Guidelines on Electronic Payments and Collection for public and Private Sectors in Nigeria. []
  13. Global Legal Group, ‘Fintech Laws and Regulations – Nigeria’ [2023] International Comparative Legal Guides International Business Reports <,to%20their%20being%20launched%20 publicly.> accessed 1 September 2023. []
  14. Other established guidelines include: CBN Guidelines for Licensing and Regulation of PSBs in Nigeria 2020 In 2022, the Securities and Exchange Commission (SEC) issued the Rules on Issuance, Offering Platforms, and Custody of Digital Assets (the “Rules”) as part of ongoing efforts to regulate digital and virtual assets, including crypto assets, in Nigeria. []
  15. ‘Global Experiences from Regulatory Sandboxes’ < Regulatory-Sandboxes.pdf>. []
  16. Ibrahim Alley, ‘BOFIA 2020 and Financial System Stability in Nigeria: Implications for Stakeholders in the African Largest Economy’ (2022) 24 Journal of Banking Regulation 184 <> accessed 29 August 2023. []
  17. ‘Digital Disruption in Financial Markets – OECD’ (Oecd.org2019 < markets.htm#:~:text=Digital%20disruption%20is%20changing%20the,costs%2C%20or%20high%20transaction%20costs.> accessed 26 August 2023. []
  18. ‘Digital Disruption in Financial Markets – OECD’ (Oecd.org2019)< markets.htm#:~:text=Digital%20disruption%20is%20changing%20the,costs%2C%20or%20high%20transaction%20costs.> accessed 26 August 2023. []

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