By Juliet Ezeh
Nigeria’s ambitious drive to bring millions of citizens into the formal financial system is facing a new and complex obstacle: a growing trust deficit over how personal data is handled in the digital economy.
After years of investment in broadband expansion, mobile penetration, and fintech innovation, industry observers say the conversation is shifting from access to assurance. The central question is no longer whether Nigerians can connect to digital financial services, but whether they feel safe enough to use them.
In 2012, the Central Bank of Nigeria set an ambitious target to reduce adult financial exclusion to 20 percent by 2020 under its National Financial Inclusion Strategy. However, by 2020 the exclusion rate remained significantly higher at 36 percent, according to the regulator’s 2022 report. The gap highlights persistent structural and behavioural barriers that infrastructure alone has not resolved.
Financial technology platforms and mobile money operators have expanded rapidly across the country, yet adoption among low-income earners and informal traders remains uneven. In bustling commercial centres such as Balogun Market in Lagos, many traders continue to rely heavily on cash transactions despite owning mobile phones and being aware of digital payment options.
Their hesitation often stems from fear rather than unfamiliarity. Reports of account breaches, fraudulent transactions, and data leaks circulate quickly within trading communities, reinforcing concerns that digital participation may expose sensitive personal and financial information. For small-scale entrepreneurs operating on thin margins, the perceived risk of losing funds or having private data misused outweighs the promised convenience of digital finance.
Industry leaders argue that connectivity is only a starting point. According to Uchenna Agbo, Chief Commercial Officer at Optasia, genuine inclusion requires confidence in the system. He maintains that trust particularly around data collection, storage, and usage is becoming the decisive factor in whether underserved populations embrace formal financial tools.
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 mandated to enforce data protection standards across sectors. While regulators have strengthened oversight, analysts caution that legal frameworks alone cannot guarantee public confidence.
Experts say financial service providers must embed privacy safeguards into the architecture of their products, an approach widely described as “privacy-by-design.” This model treats data protection not as an afterthought or compliance checkbox, but as core infrastructure underpinning digital services.
The stakes are particularly high for low-income users. Consumer advocates warn that misuse of biometric data, unauthorised sharing of financial histories, or exploitative lending practices driven by data analytics could deepen vulnerability rather than reduce exclusion. In communities where income is irregular and financial literacy may be limited, even minor breaches can have devastating consequences.
Optasia, which operates in 38 countries and serves more than 120 million monthly active users globally, notes that experiences in other emerging markets show a direct link between trust levels and digital adoption rates. Where users feel confident their data is protected, uptake accelerates; where confidence falters, expansion stalls.
As Nigeria seeks to position itself as a leading digital economy in Africa, policymakers and industry stakeholders face a delicate balancing act. Expanding infrastructure remains essential, but without credible data governance and visible consumer protection, millions may remain outside the formal system by choice rather than by circumstance.
For a country striving to close its financial inclusion gap, rebuilding trust may prove just as critical as building networks.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.