CBN Mulls Unified Regulatory Framework to Boost Fintech Expansion

Nume Ekeghe

Central Bank of Nigeria (CBN) is considering sweeping regulatory changes aimed at reducing compliance burdens for fintech operators, encouraging regional expansion, and strengthening financial inclusion, as operators contend with escalating costs and prolonged approval processes.

The apex bank’s 2025 Fintech Report, posted on its website, reiterated that it was exploring a Single Regulatory Window that would harmonise licensing and supervisory requirements across multiple regulatory agencies. The initiative is expected to significantly cut approval timelines and accelerate the launch of new digital financial products.

Data from the report shows that regulatory processes remain a major constraint on innovation, with 62.5 per cent of surveyed fintech firms stating that regulatory timelines materially affect product rollouts. More than one-third said it took over 12 months to bring a new product to the market, largely due to compliance-related delays.

On potential pathways, 2025 Fintech Report suggested, “Establishing a permanent CBN–Fintech Engagement Forum (meeting quarterly or biannually), as envi¬sioned under PSV2025, to enable candid and con¬structive dialogue as well as timely coordination on market developments, innovation pilots, and supervi¬sory concerns.

“Exploring models for a Single Regulatory Window to simplify multi-agency compliance processes and reduce time-to-market. Reviewing approval timelines and operational guide¬lines to address industry feedback on delays and ambiguity.”

The report stated that compliance costs remained a major drag on sector growth, with 87.5 per cent of respondents reporting that the cost of meeting regulatory and risk requirements significantly impacts their capacity to innovate.

“These obligations stem from internationally benchmarked AML, cybersecurity and risk management frameworks,” the report said, adding that while such rules are critical for safeguarding system integrity, they have placed disproportionate pressure on smaller and fast-scaling firms.

To ease the burden, the central bank disclosed that it was considering shared regulatory infrastructure, including a Compliance as a Service model, which would reduce duplicative reporting, lower costs for regulated fintechs, and enhance supervisory visibility.

Beyond domestic reforms, CBN revealed that it was exploring regulatory passporting arrangements to support Nigerian fintech firms seeking to scale across borders.

The report showed that 62.5 per cent of surveyed fintechs currently operated or planned to expand into other African markets, with strong support for mutual recognition of licences among peer regulators.

“Stakeholders proposed piloting this model with peer regulators in Ghana, Kenya, South Africa, Uganda and Senegal,” the report said, describing bilateral pilots as a more realistic short-term route to regional integration.

On digital assets, the central bank signalled a move towards a more nuanced approach to cryptocurrency regulation, balancing innovation with financial integrity rather than imposing blanket restrictions. Fintechs surveyed acknowledged crypto’s potential to enable cost-effective cross-border payments and strengthen remittance channels, while also highlighting risks related to illicit financial flows and consumer protection.

The report said, “There was broad agreement on the need for a risk based, activity focused regulatory framework.”

It cautioned against equating all crypto activity with criminality, particularly as many scams originated offshore.

The report also drew attention to growing calls to revisit the operational scope of Payment Service Banks (PSBs), especially restrictions that prevented them from extending credit despite their reach in underserved communities.

Stakeholders urged the regulator to either review the PSB framework or introduce a dedicated digital banking licence capable of supporting inclusive lending under stronger prudential oversight.

“A dedicated digital bank licence may be a more effective pathway for inclusive lending than expanding the PSB mandate,” the report stated.

It stressed the need for close coordination between CBN and Nigerian Communications Commission (NCC).

In the foreword, the CBN governor, Olayemi Cardoso, reaffirmed the central bank’s commitment to promoting innovation without undermining financial stability.

Cardoso said, “For the CBN, innovation is a strategic imperative. We are committed to creating an environment where new ideas can flourish under prudent oversight, and where inclusion is at the heart of our endeavours.”

He added that fintechs must help deliver financial services to the last mile, “From the bustling cities to the rural villages, so that no Nigerian is left behind in the digital economy.”