E-Financial
Regulators Urged to Allow Cloud Tech in Financial Services
African regulators have to support and approve the use of cloud technology within the financial sector, says a new industry report.
The study, Cloud Banking in Africa: The Regulatory Opportunity, by Genesis Analytics and Orange Business Services, says cloud computing has the potential to unlock value in financial services through reducing costs.
It urges regulators to follow global trends in the use of cloud technology within the financial sector, saying cloud computing creates an opportunity for service providers to rethink their technology spend and significantly reduce costs.
“The report urges African regulators to develop clear policy positions and regulations on data privacy, risk and security; data sovereignty; cyber crime; protection of intellectual property; vendor risk; and migration complexity as well as operational risk, to enable financial institutions to reap the benefit of cloud banking,” says Genesis Analytics.
The report calls upon African regulators to follow their peers in the European Union, which it says has been at the forefront of defining an enabling regulatory environment for cloud banking services, which involved both the regulation of the use of data, and privacy and protection of data.
It reads: “Under the regulations, financial institutions have to ensure consumer personal data is gathered legally and under strict conditions and that consumer data is fully protected. Other developing markets like Turkey and Argentina have adopted similar legal and regulatory environments, which has enabled the use of cloud banking in their financial sectors.”
The researchers argue further that more than 700 million Africans lack access to a bank or mobile money account, and cloud solutions can ease the situation as they help reduce the costs of serving clients.
The report says cloud computing allows banks to pay less for ICT infrastructure and services, and achieve higher utilisation on ICT spend.
“Particularly for small banks in small markets where specialised ICT skills are in short supply, cloud computing can ease a critical operational constraint.
“The most compelling reason to move to the cloud is undoubtedly cost savings, but there are other business reasons too. The flexibility of cloud-based operational models allows financial institutions to experience shorter development cycles for new products, which supports a faster and more efficient response to the needs of customers.
“Cloud computing provides the computer power necessary to deliver analytical insights in real-time, which enables financial institutions to move towards a customer-centric model where the financial needs of customers are fully understood. Financial institutions can also gain a higher level of data security, resilience, fault tolerance and disaster recovery from cloud computing.”
According to the report, a few international and African banks have already realised the value of cloud banking.
The naira appreciated to N1,600 per dollar in the parallel market at the close of trading hours on Monday, strengthening from N1,610 per dollar recorded over the weekend.
Similarly, the naira saw a slight gain in the Nigerian Foreign Exchange Market (NFEM), trading at N1,605 per dollar compared to N1,606 last Friday, according to data from the Central Bank of Nigeria (CBN). This represents a marginal N1 appreciation.
As a result, the gap between the parallel market and official exchange rate widened slightly to N5 per dollar, up from N4 over the weekend.
Central Bank of Nigeria (CBN) spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306 per cent compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown.
Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes.
The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.
The surge in expenditure came as the country continued to deal with the effects of the naira redesign policy introduced in late 2022.
Despite efforts to stabilise cash circulation throughout 2023, Nigerians still faced queues at ATMs and difficulties in accessing cash in early and late 2024.
Faced with mounting public outcry, the CBN deployed several emergency measures to address the crisis.
Deposit Money Banks were directed to ensure consistent ATM loading and rural cash distribution, while the Bank also launched public hotlines for citizens to report cash scarcity incidents.
Also, the CBN ramped up enforcement efforts, including deploying monitoring teams, issuing sanctions against non-compliant banks, and mandating improved cash distribution.
PalmPay, a full-service digital bank, has reaffirmed its dedication to advancing the future of payments in Nigeria by promoting the widespread adoption of contactless-enabled payment terminals.
This was made known during the recently concluded BusinessDay Future of Payment Conference, themed “Fintech Evolution: Gateway to Payments.” In his welcome address, BusinessDay Publisher, Frank Aigbogun, emphasized that the next phase of fintech innovation must be driven not only by speed, safety, and simplicity but also by trust, inclusion, and accessibility to ensure broad-based impact across all segments of society.
Talking about PalmPay’s impact in the panel session titled “The Next Wave of Digital Payments: Trends and Innovation,” Ifeanyi Uzoka, Senior Business Development Manager at PalmPay, discussed the evolving landscape of digital payments in Nigeria.
He noted that while regulatory frameworks have supported the introduction of contactless payments, the high level of cash dependency remains a key barrier to widespread adoption.
“At PalmPay, financial inclusion is central to everything we do,” Uzoka stated. “To support this mission, we’ve launched contactless-enabled debit and premium cards, ensuring our users have access to convenient and secure payment experiences. We also understand that trust is critical, which is why all contactless transactions on PalmPay’s platform include an additional layer of authentication for enhanced security.”
PalmPay continues to lead innovation in Nigeria’s digital finance ecosystem by delivering secure, user-friendly, and future-ready solutions. The company’s recently launched debit and premium cards in partnership with Verve are now serving its growing base of over 35 million users nationwide.
This move into contactless payments underscores PalmPay’s alignment with global payment trends and its ongoing commitment to building a more inclusive and digitally empowered economy.
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