The Central Bank of Nigeria (CBN) has released operational guidelines for open banking to promote innovation, access and competition in the Nigerian financial services sector. The new regulations allow customers to have control and ownership of their data and the ability to grant authorisation to third-party firms to access financial products and services. The open banking API standards are free for banks and other financial institutions and define the roles of participating entities, including API Providers (AP), API Consumers (AC), and Customers.
The Open Banking Nigeria project, supported by industry professionals, aims to simplify and transform payments in the country. Among the early backers who were part of the committee that drafted the guidelines are Sterling Bank, KPMG, PwC, EY, Paystack, Teamapt, Wallet Africa, and OnePipe. The guidelines enable customer permissioned data to foster collaborations between banks and third-party firms to create customer-focused products and services.
In addition, the Nigeria Data Protection Regulation (NDPR) of 2019 underpins data privacy as a foundational pillar for open banking in Nigeria. The open banking regulation is expected to promote financial inclusion and improve access to banking services for individuals and businesses, especially those in remote areas. The new guidelines are expected to create a more competitive environment in the banking industry, leading to improved customer service and better financial products for consumers.
The CBN has emphasised the need for financial institutions to comply with the guidelines to ensure that customers’ data is protected and secure. The open banking API standards will promote the development of new financial products and services that are more customer-focused and provide greater value. This initiative will enable banks to collaborate with third-party firms, leading to increased innovation and improved access to financial services for individuals and businesses across Nigeria.
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