Nigeria is poised to become the first African country to implement open banking, as the Central Bank of Nigeria (CBN) has officially approved the rollout of the long-anticipated initiative, set to begin in August 2025. This landmark decision comes four years after the release of the original regulatory framework and marks a significant step in advancing regulatory technology solutions across the continent.

Under the new open banking regime, Nigerian bank customers will be empowered to grant regulated financial institutions access to their financial data, including account balances, transaction histories, and spending patterns, through a standardized API infrastructure. In certain cases, these institutions will also be able to initiate transactions on behalf of customers, contingent on consent.

The compliance management system underpinning open banking will feature a central registry to authenticate participating entities, alongside a consent management framework tied to Bank Verification Numbers (BVNs). This ensures strict data privacy controls and gives users full autonomy over who accesses their information and for what purposes.

Initially, the CBN faced industry resistance over proposed central oversight by the Nigerian Interbank Settlement System (NIBSS). In response, the Apex Bank revised its governance model, forming independent oversight committees led by banking professionals and fintech experts without direct CBN control—signaling a move toward regulatory decentralization and stakeholder-driven governance.

The potential impact of open banking on Nigeria’s financial ecosystem is profound. With access to deep, historical customer data from over 120 million bank users, financial institutions, including fintech startups and traditional lenders, will be better equipped to build tailored, data-driven services. The most transformative application is expected to be in risk assessment and credit scoring.

Historically, credit access in Nigeria has been hampered by poor data availability and rigid internal controls, resulting in low financial inclusion and high barriers to affordable credit. Despite fintechs attempting to bridge this gap, their limited data access has led to a surge in subprime lending and regulatory concerns over unethical collection practices.

Open banking is expected to change this narrative. By sharing reliable transaction and behavioral data through secure APIs, lending institutions can enhance compliance analytics, offer personalized credit products, and develop robust, real-time compliance assessment tools to reduce default rates and improve borrower experiences.

Moreover, this initiative lays the groundwork for a regulatory compliance framework that promotes compliance automation, financial crime prevention, and innovation across payments, wealth management, insurance, and digital banking services.

As Nigeria moves toward the August 2025 implementation date, stakeholders anticipate a surge in RegTech innovations, improved regulatory intelligence, and greater cross-sector regulatory collaboration to build a more inclusive, transparent, and competitive financial landscape.