Nigeria’s financial services sector is entering a decisive new phase after the Central Bank of Nigeria (CBN) granted national operating licences to leading fintech companies such as OPay, Moniepoint, PalmPay, and Kuda, enabling them to compete directly with commercial banks across retail banking and small-business finance.
The move effectively places fintech firms on equal regulatory footing with traditional banks, allowing them to scale operations nationwide and deepen their reach into Nigeria’s fast-growing digital economy.
Reacting to the development, Timi Fadeyi, head of data centre at Galaxy Backbone Nigeria, said the decision reflects a fundamental shift in how financial infrastructure is being designed and deployed in the country.
“Traditional banks built infrastructure assuming customers would adapt to banking requirements. Fintechs built infrastructure adapting to customer realities, intermittent connectivity, informal income patterns, mobile-first interactions, and trust networks operating outside formal financial systems,” Fadeyi said in a LinkedIn post.
While the expansion of fintech raises concerns about the future of traditional banking, Fadeyi stated that the shift does not mean banks will disappear. Instead, it signals a gradual erosion of relevance as customer relationships migrate to digital platforms.
“The death of traditional banking isn’t about institutions closing branches — it’s about relevance erosion, where banks become infrastructure providers for fintech platforms that control customer relationships and define how African wealth gets created, preserved, and transferred over the next decade,” he said.
Yemi Solaja, director of the other financial institutions supervision department at the CBN, during the annual committee of Heads of Banks’ Operations (CHBOs) conference, stated that the upgrade is not automatic and institutions must meet specific compliance and operational benchmarks before qualification.
As fintech firms leverage national licences to expand product offerings and geographic coverage, competition in Nigeria’s banking sector is expected to intensify, accelerating innovation, lowering costs, and broadening access to financial services.
Read also: CBN upgrades licences of OPay, Moniepoint, Kuda, other fintechs to national status
Data obtained from the Nigeria Inter-Bank Settlement System (NIBSS) stated that Nigeria’s point-of-sale (POS) transactions surged to N18 trillion in 2024, a 69 percent increase from N10.7 trillion in 2023, driven largely by fintech-led agency banking networks and mobile payment platforms.
During the same period, personal remittances reached a record $20.9 billion, reflecting increasing digital adoption and the growing role of fintech in cross-border payments.
Central Bank of Nigeria(CBN) officially implemented its Open Banking framework in August 2025, marking a landmark move for Africa’s financial sector.
The framework, built upon 2021 regulations and 2023 guidelines, enables authorised third-party providers (TPPs) to access customer data via APIs, facilitating improved financial services, enhanced competition, and better credit access, while requiring strict, consent-driven data sharing.
The policy shift is expected to intensify competition, forcing financial institutions to compete on service quality, user experience, and product innovation rather than relying on legacy market dominance.
Fadeyi argues that the next phase of financial competition will not be determined by balance sheet size, but by control of financial behaviour infrastructure, the digital rails that shape how people save, borrow, invest, and transact daily.
“Traditional banks hold deposits. Fintechs hold behavioral data, which they transform into personalised financial products, adapting to individual circumstances rather than forcing individuals into standardised banking models,” he stated.
