In its effort to boost innovation in the banking industry, the Central Bank of Nigeria (CBN) has issued the regulatory framework for Open Banking in Nigeria. Open banking is a practice whereby third-party financial service providers are given access to customer banking, transaction, and other financial data which is expected to drive competition and enhance access to banking and payments services. The guidelines are contained in a document titled “Operational Guidelines For Open Banking In Nigeria”.
It reads as follows, “The Central Bank of Nigeria, hereafter called the Bank, had issued the regulatory framework for open banking in Nigeria in its efforts to enhance competition and innovation in the banking system.
“The Bank recognized the existence of an ecosystem for Application Programming Interface in the banking and payments system and is aware of various efforts in the industry to develop acceptable standards among stakeholders.
“Open Banking in Nigeria across the banking and payment system will promote innovations and broaden financial products and services, which involves sharing of customer data and interconnectivity of systems, therefore, exposing the participants to risks such as cyber security, money laundering, regulatory and compliance, contract management, product management among others”.
The apex bank said customers will always have access to their data and will be able to manage or withdraw their consent at any given time.
According to the CBN, “Any organization that has data of customers, which may be exchanged with other entities for the purpose of providing financial services within Nigeria is eligible to participate.
“Participants shall adhere strictly to security standards when accessing and storing data, and shall be subject to minimum privacy standards, operational standards, risk management standards, and customer experience standards as prescribed by the Bank”.
