CBN Tightens Belts on Banks, Fintechs For Efficient Service Delivery

By Fola James

The CBN is set to tighten regulation on products and solutions provided by commercial and registered financial institutions in the country, under the apex bank’s sandbox operations.

The regulatory sandbox is a formal framework for Deposit Money Banks, DMBs and other financial institutions to conduct live tests of new products, services, delivery channels or business models in a regulated environment, with regulatory oversight, subject to approval of the CBN.

Sources close to the Godwin Emefiele led government bank said the apex regulator is not happy that most products and services being dished out by many banks have narrowed customers’ choice and restrict opportunities for competition.

The CBN will no longer allow this to happen said the source, who explained that the new regulatory framework will ensure that consumers have a say, lower costs and provide avenue for fintechs to interact with payment service users for desired economic growth in the country.

According to the circular issued by CBN to commercial banks on Monday, the apex bank said it would no longer be business as usual, noting that banks must obtain its approval before the commencement of any service or product.

The apex bank said it’s “committed to building a financial services sector that promotes stability, faster innovations and deep inclusion. The framework details the requirements for conduct of live tests on innovative products, services and other solutions in a controlled environment.”

‘To this end, the CBN shall review the products and solutions of applicants ( licensed institutions, fintechs innovators and researchers during implementation,” the circular said.