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In February 2020, the Central Bank of Nigeria (CBN) issued a regulatory framework for Open Banking in Nigeria. The framework establishes principles for data sharing across the country’s banking and payments ecosystem.
The regulation features several provisions relevant to banks, fintech companies, and everyone else in or outside of the banking system.
Open Banking is a technology that will create a harmonised portrait of an entire financial life. It brings the possibility of creating a unified platform to manage every aspect of financial details.
Banks, fintech companies, and other financial services providers will facilitate this process by sharing data across the entire banking ecosystem. In 2018, Open Technology Foundation (OTF), a not-for-profit organisation, launched Open Banking Nigeria with a set of free APIs that covers almost every aspect of the banking system.
For Open Banking to work, traditional banks and financial institutions need to share data, but that has been a challenge. The CBN was not ready to regulate the novel initiative, and it was difficult to get banks on board.
According to Adedeji Olowe, a trustee of Open Banking Nigeria, the novel technology would pave the way for innovation within the country’s financial innovation and be a catalyst for financial inclusion.
“More importantly, it would drive access to credit which is a key piece for value creation,” he says.
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