FG's Galaxy Backbone Eyes Financial Institutions Amidst CBN Data Residency Mandate

The Federal Government-owned Galaxy Backbone is stepping up its efforts to attract banks, fintech companies, and other financial institutions to utilize its digital infrastructure services. This intensified drive comes on the heels of a recent directive from the Central Bank of Nigeria (CBN) requiring all payment transaction data generated within the country to be stored on local servers.

The announcement was made in a statement released by Galaxy Backbone on Monday, following a second-quarter webinar the organization hosted for Chief Information Officers from banks, fintech firms, and other technology stakeholders. The webinar, themed “Building Digital Trust in Nigeria’s Financial Sector: Navigating Regulatory Compliance and Infrastructure Performance,” focused on the increasing demand for secure digital infrastructure as financial institutions adapt to evolving regulatory requirements and the rapid adoption of digital services.

According to the statement, this event coincided with the CBN's directive for banks, fintech companies, mobile money operators, and other payment service providers to ensure that payment transaction data originating in Nigeria is stored on local servers. The policy, the statement clarified, is designed to bolster regulatory oversight, enhance transparency, mitigate concentration risks, and guarantee that crucial payment data remains within Nigeria’s jurisdiction.

During the webinar's opening, Ibrahim Sani, Galaxy Backbone’s Executive Director of Finance, emphasized that the swift evolution of Nigeria’s financial sector underscores the need for trusted digital infrastructure capable of supporting secure, reliable, and future-ready financial services. He highlighted that Galaxy Backbone already provides the digital backbone for both public and private sector institutions, including several financial entities that depend on its secure connectivity, cloud, and data centre services. Sani further stated that the organization is well-prepared to support the industry's compliance journey by offering resilient infrastructure that meets both evolving regulatory and business needs.

Olumbe Akinkugbe, the Executive Director for Digital Exploration and Technical Services, was also quoted in the statement, asserting that adherence to CBN directives and other regulatory frameworks is essential for strengthening transparency, accountability, consumer confidence, and the security of financial data within Nigeria's increasingly digital economy.

During the webinar, Thomas Oghenebhumhe, Galaxy Backbone’s Head of Automation and Integration, demonstrated the organization’s sovereign cloud capabilities. He explained how a resilient cloud infrastructure allows financial institutions to innovate faster, improve operational efficiency, protect sensitive information, and maintain compliance with regulatory standards.

The presentation prompted engaging discussions among participants on topics such as cloud migration, data sovereignty, and regulatory compliance. Samuel Olusola Oyeleke, Head of Data Centre Operations, also showcased Galaxy Backbone’s globally certified Tier III and Tier IV data centre infrastructure, noting that these facilities offer the resilience, high availability, and reliability necessary for uninterrupted digital services, disaster recovery, and business continuity for mission-critical financial operations.

Concluding the webinar, Olusegun Olulade, the Executive Director for Customer Centricity and Marketing, underscored the importance of collaboration among regulators, technology providers, and financial institutions to strengthen digital trust. He pointed out that as Nigeria’s financial ecosystem becomes increasingly digital, organizations must invest in infrastructure that not only fulfills regulatory requirements but also guarantees resilience, security, business continuity, and customer confidence.

Olulade reaffirmed Galaxy Backbone’s commitment to supporting the financial services industry with “secure, resilient and globally aligned digital infrastructure that enables institutions to innovate with confidence while maintaining compliance with evolving regulatory standards.” The statement further detailed that the organization’s Uptime-certified data centres, Payment Card Industry Data Security Standard (PCI DSS) certification, sovereign cloud platform, and nationwide fibre infrastructure offer banks, fintechs, and payment service providers robust platforms for secure data hosting, payment security, regulatory compliance, business continuity, and disaster recovery. This infrastructure, it added, also addresses the growing need for data sovereignty by ensuring that critical financial data is securely hosted within Nigeria, in line with regulatory expectations.

Earlier, The PUNCH had reported that the Central Bank of Nigeria directed banks, fintech firms, and other payment service providers to store payment transaction data generated within the country on local servers, effective January 1, 2027. This forms part of new measures to enhance oversight of the rapidly expanding digital payments ecosystem.

The directive was communicated through a circular issued by the Payments System Supervision Department of the CBN. It was addressed to various entities, including deposit money banks, microfinance banks, mobile money operators, switching and processing companies, payment terminal service providers, payment solution service providers, super agents, and other licensed operators in the payments industry. The circular, signed by Rakiya Yusuf, Director of the Payments System Supervision Department, also introduced new market structure rules, beneficial ownership disclosure requirements, and systemic oversight measures for payment service operators.