CBN Approves Open Banking System in Nigeria: This article contains All You Need to Know about Open Banking operations and regulations recently approved by the Central Bank of Nigeria.
Note: The link to download the Operational Guidelines for Open Banking in Nigeria can be found at the end of this article.
GoldenNewsNg report that the Central Bank of Nigeria has approved the operational guidelines to open banking in Nigeria kickstarting an open banking regime in Nigeria. The guideline was released via a circular by Musa Jimoh, the Director of the CBN’s Payments System Management Department on March 7, 2023.
The open banking regulation would usher in a transformation time for financial innovation and financial inclusion in Nigeria and Africa as a whole.
The release of the final guideline is a culmination of a long journey for open banking in Nigeria. On June 1, 2017, a group of industry veterans, led by Adedeji Olowe, decided that Nigeria needs to lead with payments innovation and formed an open banking working group which ultimately became formalized as Open Banking Nigeria. The group engaged with banks, fintechs, CBN, and other international stakeholders.
How will open Banking work?
According to research, Open Banking will enable the sharing of customer-permissioned data between banks and third-party firms. This system allows banks to securely share their customer data with third-party companies, such as fintech and other financial service providers, with the consent of their customers.
This sharing of data is done through Application Programming Interfaces (APIs), which act as a bridge between the bank’s systems and those of the third-party firms.
Once a customer gives their consent for their data to be shared, the third-party firm can access their data through the bank’s APIs. This data includes information about the customer’s transactions, account balances, and other relevant information. The third-party firm can then use this data to develop innovative products and services that are tailored to the customer’s needs. .
