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CBn Emefiele

Financial stress, insecurity may force banks to fail CBN’s deadline on data centre

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Disquiet can be said to be the state of affairs at several banks in Nigeria considering the closeness of Central Bank of Nigeria’s (CBN) deadline for them to adopt tier 3 data centre standard before the end of third quarter.

Analysts say data centre is an information technology infrastructure that houses servers and other storage facilities which are used by banks and corporations among others for their core business process and administration.

Tier 3 model in the views of Uptime Institute Tier Standard is a global standard based on availability specifications for data centres in financial institutions whereas Tier 942 Standard for Data Centres is a telecommunications standard that specifies requirements for telecommunications infrastructure and facilities of data centres.

Explaining more on the matter, managing director of Computer Warehouse Group plc, James Agada, said due to time constrain coupled with recession and forex crisis, many local banks are now finding it hard to take final decision on whether to outsource or invest much in training their staff for security reason.

The banks are now at the middle of the sea in which line of action will best serve the purpose in beating CBN’s deadline and at the same time guarantee the security of their data at a time cybersecuirty is a global threat.

He explained however that “From technical and economic considerations it is better for banks to outsource their data centres. But, then banks also consider security and control of their information warehoused in the data centre,” he said.

In his submission, another data centre expert, Dr. Alvan Ikpa told Business Hilights on phone that “For banks to own and take full charge of managing its data centre remains the best option and surest way to be safe, but the cost of building and maintaining it may not be within the reach of many banks under current stress circumstances”.

Otherwise, investing and managing of tier 3 data centre is a huge investment for banks to undertake going by the present economic situation in the country as well as high technical expertise it requires which is the reason they have opt for outsourcing.

On availability of Tier 3 in the market, managing director of Rack Centre group, Ayotunde Coker said there are 2.2 percent of available Tier 111 space in the market with a total colocation market of tier 111 design certified of 2,600 m2, hinting that has a total colocation market capacity of 5,825 m2 which suggest current outsourcing of 4.8%.

The CBN report was based on respondent of 15 banks which include Access, Citibank, Diamond, FCMB, First Bank, GTB, Keystone, Skye Bank, Stanbic IBTC, Standard Chartered, Sterling, UBA, Union, MainStreet and Wema Bank.

The report added further that the standard shall be applicable to all banks and external (managed) service providers in the financial services industry.  All data centre infrastructure and facilities for the Nigerian FS industry shall satisfy the requirement for tier 3.

Some of the banks who spoke to our correspondent on their readiness however expressed reservations on which of the options between outsourcing and in house development of the data centre they may chose.


Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.
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