Growing concerns over data privacy and security are emerging as a significant barrier to Nigeria’s financial inclusion drive, despite years of investment in connectivity and digital infrastructure.
While policymakers and industry stakeholders have long focused on expanding broadband access, mobile penetration, and fintech innovation, experts now argue that trust — particularly around how personal data is collected, stored, and used — may determine whether millions of Nigerians join the formal financial system.
In 2012, the Central Bank of Nigeria set a target to reduce the country’s adult financial exclusion rate to 20 per cent by 2020 under its National Financial Inclusion Strategy. However, the exclusion rate stood at 36 per cent in 2020, according to the regulator’s 2022 report, underscoring persistent gaps in access and adoption.
Industry leaders say the challenge is no longer primarily about infrastructure.
“Increasing connectivity is essential, but it is only a prerequisite,” the Chief Commercial Officer at Optasia, Uchenna Agbo, said. “True inclusion requires meaningful participation, and that depends on trust.”
Across major commercial hubs such as Balogun Market, traders who rely heavily on cash transactions often remain hesitant to adopt digital financial services. Although many own mobile phones and are aware of mobile money platforms, concerns about fraud, account hacking, and misuse of personal information continue to discourage uptake.
Stories of compromised accounts and data leaks have circulated widely, reinforcing fears among small business owners that using digital systems could expose sensitive personal and financial information
For many low-income earners, privacy risks are seen not as abstract regulatory issues but as threats to livelihoods.
The issue has gained renewed prominence following the enactment of the Nigeria Data Protection Act and the establishment of the Nigeria Data Protection Commission, which is tasked with enforcing data protection standards and promoting responsible data practices across sectors.
Analysts say regulatory frameworks are necessary but insufficient on their own. They argue that financial service providers must move beyond compliance and embed privacy protections into the design of products and services, a model often referred to as “privacy-by-design”.
“Data privacy should not be treated as a compliance obligation or a technical feature added at the end of development,” Agbo said. “It must be seen as core infrastructure, as fundamental as the networks and platforms that deliver the services.”
Optasia, which operates in 38 countries and serves more than 120 million monthly active users globally, says lessons from other markets show that trust directly influences digital adoption rates, particularly among underbanked populations.
Consumer advocates note that for low-income users, the consequences of privacy breaches can be severe. Misuse of biometric data, unauthorised sharing of financial histories, or predatory lending practices enabled by data analytics can undermine confidence and deter participation in formal systems.