Local hosting directive will cut banks, fintechs' forex exposure – ALTON
By Aboki Forex —
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) says the Central Bank of Nigeria's new directive on local hosting of payment data will help banks and fintechs reduce their exposure to foreign exchange volatility.
ALTON Chairman Gbenga Adebayo spoke with the News Agency of Nigeria in Lagos on Saturday. He expressed strong support for the CBN policy.
The CBN directive requires banks, fintechs, and other payment service providers to store payment transaction data generated in Nigeria on local servers from January 1, 2027. The move is part of broader efforts to strengthen regulatory oversight of the country's fast-growing digital payments ecosystem.
What Adebayo is saying
Adebayo said the currency benefit of local hosting goes beyond simple cost savings. It reduces long-term operating risk for financial institutions.
He argued that organisations hosting data locally would pay in naira rather than foreign exchange. This helps reduce exposure to exchange rate pressures and lowers long-term operating costs.
Beyond the financial argument, Adebayo framed local hosting as a matter of national data sovereignty. He said countries must take full responsibility for their data value chain, covering collection, management, storage and integrity assurance.
“We cannot continue to outsource that to other jurisdictions. The more we host our data locally, the better for us,” he said.
He also pointed to performance costs tied to hosting data abroad. Every transaction routed to a foreign server adds communication overhead. It increases latency and raises the cost of data retrieval.
On security, Adebayo argued that local control offers stronger protection than relying on foreign providers.
“No one can protect your house better than yourself. You have more at stake in terms of security and safety than somebody else hosting your data,” he said.