The Central Bank of Nigeria (CBN) has given approval for the operation of Open Banking in Nigeria.
In Nigeria, the term “open banking” refers to data sharing throughout the nation’s banking and payment systems.
The purpose of the project is “to foster innovations and widen the range of financial goods and services available to bank customers,” according to the policy establishing Open Banking.
It also recognises the right of the customer “to grant authorisations to service providers for the purpose of accessing innovative financial products and services”.
Open Banking can be used to access customers’ information in relation to Agency Banking, Financial Inclusion, Know Your Customer (KYC), credit scoring/rating etc.
The CBN said the guidelines are anticipated to drive competition and improve accessibility to financial and payments services.
Specifically, the CBN has warned participants in Open Banking to “adhere strictly to security standards when accessing and storing data, and to observe minimum privacy, operational, customer experience and risk management standards as prescribed by the Bank”.
With regards to those that will operate in the Open Banking ecosystem, the CBN has identified “any organisation that has data of customers which may be exchanged with other entities for the purpose of providing innovative financial services within Nigeria.
“Entities participating in Open Banking are categorised into two. They: API Provider (AP): this refers to a participant that uses Application Programming Interface (API) to avail data or service to another participant.’’