When policymakers face a new challenge, the instinct sometimes is to create a new institution. Nigeria may be about to do exactly that with our financial sector regulation. The Fintech Regulatory Commission Bill 2025 is designed to regulate a rapidly evolving industry.
But before we set up yet another regulator, shouldn’t we consider a bigger question: is the problem the absence of regulators, or are we trying to regulate a system that no longer mirrors the reality of how financial services operate? The structure of the financial sector in Nigeria has undergone a complete transformation in the last twenty years. For instance, banks presently do so much more than banking.
Fintech firms also lend money, process payments and operate investment services, providing tools that until some years ago were separate slices of the financial services industry. Financial holding companies can be owners of banks, pension fund administrators and custodians, insurance companies, and payment firms.
Interestingly, even with the emerging dynamics in our regulatory sector, the regulatory structure still behaves as though these activities exist in separate worlds, in line with the institutional approach to regulation which we currently use in Nigeria. The framework was designed for a time when financial institutions fell neatly into categories. Banks had one regulator. Insurance companies had another. The lines were relatively clear.
A customer can receive a loan through a mobile app, fund it through a bank account, repay it through a payment platform and invest savings through a digital investment service, all within the same financial ecosystem. Yet different parts of that activity may be overseen by different regulators. This is exactly what the proposed Fintech Regulatory Commission Bill for the finance industry points out.
It is an acknowledgement of the agencies that are currently present and regulating the industry: Central Bank of