Why Trust Must Drive Nigeria’s Tech Transformation

By Muideen Abubakar

In Nigeria’s increasingly digital economy, innovation is advancing faster than trust. Fintech apps, ride-hailing, e-commerce platforms etc. are popping up in rapid speed, and the momentum is undeniable. Notwithstanding, a major disaster may be unfolding beneath this surge – the erosion of user trust in how their data is collected, handled or shared. This ‘digital trust’ is a far more valuable currency and expectedly, a very finite resource. As such, if squandered would prove quite difficult to mint again.

If you take a closer look at the average Nigerian fintech app today, how many of them give you clear, unambiguous choices about how your data will be used? How often do we find companies asking for excessive permissions — access to your contacts, or SMS history — just to open an account? And worse still, how often is that data sold, scraped, or misused without consequence?

It’s no news how a lot of Nigeria’s digital lending apps (majority being loan sharks) were harvesting personal data from users without proper consent, or in a manner contravening the Data Protection Act. Some of these apps notoriously shamed borrowers by messaging their contacts — a practice not only unethical but illegal under the Nigeria Data Protection Regulation (NDPR) of 2019. Yet, accountability has been patchy at best. The consequence? User confidence is waning and users are increasingly hesitant to engage with digital platforms — not because they are technophobic, but because they are cautious. In communities where we find low National Identification Number (NIN) enrollments, mistrust in digital identity systems may be a contributing factor as many of these people lack clarity on where this data goes and how it is used.

To credit the government, it has taken some steps. The NDPR was a welcome milestone in 2019. And earlier this year, the Nigeria Data Protection Act was signed into law, establishing the Nigeria Data Protection Commission (NDPC). But regulation, while necessary, is only the floor — not the ceiling.

Meanwhile, it is worth emphasizing that laws don’t build trust – transparency does. And very few institutions have invested in the kind of transparency that enhances user confidence. Privacy policies are buried in fine prints that even lawyers hesitate to read. Terms of service change without notice and when data breaches happen, silence, not disclosure, is the default response. It is worth comparing this to how European companies operate under the General Data Protection Regulation (GDPR), where user consent must be freely given, specific, informed, and unambiguous. And indeed, violations attract stringent penalties, a case in point are big tech firms that have been heavily fined for mishandling user data and other forms of data-related infractions.

All isn’t doom and gloom though. Fintechs like Carbon, which evolved from a lending startup into a full-stack digital bank, have begun investing more visibly in user trust — offering in-app privacy controls, biometric security, and customer education on data rights. The healthtech, Helium Health, which handles sensitive patient data, has consistently highlighted its compliance with health data privacy standards and encryption protocols — a rare move in a space where “data security” is often just a marketing slide. More broadly, civic tech groups like BudgIT and TechHer have run successful campaigns to educate citizens on digital rights and the importance of data ownership. But these efforts are still fringe compared to the scale of Nigeria’s digital transformation.

In markets where trust is absent, adoption suffers, churn rises, and reputations crash faster than apps launch. A PwC report corroborates this, where 85% of consumers claim that they wouldn’t do business with a company if they have concerns about their data privacy. Building trust isn’t just ethical. It’s a strategic moat. In the long run, the fintechs and digital platforms that win will be those that treat privacy as a feature, not a legal formality. Hence, we need to create systems where users know and believe that their data is safe. If we want to unlock the true promise of fintech, healthtech, edtech and other forms of tech, then we must treat digital trust not as an afterthought, but as the foundation.

Muideen Abubakar is a Data expert focused on data-driven investing. He has worked across asset management and fintech in Nigeria and the UK, and writes on the intersection of technology, finance and policy.