Regulatory Silence and Financial Arbitration: Lessons from Banks and Other Financial Institutions Act 2020(Bofia 2020) and the Central Bank of Nigeria (Cbn) Regulatory Framework for Sandbox Operations

Abstract

Nigeria’s banking sector has undergone rapid digital transformation, driven by electronic payments, fintech innovation, and regulatory initiatives such as the Banks and Other Financial Institutions Act 2020 (BOFIA 2020) and the Central Bank of Nigeria’s Sandbox Operation Framework. While these instruments actively facilitate technological advancement, they remain institutionally silent on dispute resolution mechanisms for conflicts arising from technology-driven financial transactions. This article argues that such regulatory silence reflects a structural gap within Nigeria’s financial governance architecture. Innovation has been formally embedded, but adjudication has not. Adopting a doctrinal and comparative methodology, the article examines BOFIA 2020, the CBN Sandbox Framework, and the Arbitration and Mediation Act 2023, situating Nigeria’s approach within broader regulatory theory and comparative experience from leading financial jurisdictions. This article argues that arbitration, particularly in its technology-enabled form, should be conceptualised not merely as private contractual ordering but as regulatory infrastructure essential to digital financial systems. In complex environments involving electronic evidence, cross-border payment disputes, cybersecurity risks, and finTech collaborations, arbitration offers procedural flexibility, confidentiality, and enforceability under the New York Convention. The article proposes targeted reforms to integrate arbitration into Nigeria’s financial regulatory design, including express statutory recognition within BOFIA and structured disputes planning within the Sandbox Framework. It concludes that regulatory coherence requires alignment between innovation policy and adjudicatory architecture. Embedding arbitration within Nigeria’s financial governance framework would transform regulatory silence into institutional resilience and enhance investor confidence in the country’s evolving digital economy.