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Banks at crossroads over CBN deadline on data centre

By Chike Onwuegbuchi   |   17 March 2017   |   2:45 am

CBN building

Money deposit banks are at crossroads over whether to fully outsource their data centre operations or get theirs certified to the required standard in view of security and control concerns as they race to meet with Central Bank of Nigeria (CBN) directive to adopt tier 111 data centre standard this year.

Data centre is an information technology infrastructure that houses servers and other storage facilities which are used by banks, among others for their core business processes.

Tier 3 standard according to Uptime Institute Tier Standard is a global standard based on availability specifications for data centres. TIA 942 Standard for Data Centres is a telecommunications standard that specifies requirements for telecommunications infrastructure and facilities of data centres.


James Agada, managing director, Computer Warehouse Group plc, told Nigeria CommunicationsWeek that banks are faced with many considerations in management of their data centres.

“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.

It was gathered that investing and managing of tier 111 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.

Agada added that the specifications of tier 111 data centre is too big and not realistic for banks to adopt, he however, advocated outsourcing which he said some banks have already adopted. This allows banks to host their servers and other storage facilities at data centre of third party operator mostly telecommunications operators that have what it takes to run a data centre effectively.

He cautioned that such outsourcing model for data centres should not be driven by regulatory fiat but economic value for it not to go the way of Independent ATM Deployers (IAD), which did not bring any economic value that led to the collapse of their business model.

“In order not to have the same experience, outsourcing business model for data centre should be driven by economic value of the model to banks for it to succeed,” he stated
On availability of Tier 111 in the market, Ayotunde Coker, managing director, Rack Centre, Tier 111 data centre operator, said that 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.

He added that the country has a total colocation market capacity of 5,825 m2 which suggest current outsourcing of 4.8%.

The adoption timeline is contained in a report conducted for CBN by accenture on IT standard for banks obtained exclusively by Nigeria CommunicationsWeek.

The 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.

On the scope of adoption, the report stated that ‘this 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 111’.




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