Central Bank of Nigeria (CBN) has approved operational guidelines for open banking 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.
According to its proponents, open banking will usher in a new age of financial inclusion and innovation and prove that Nigeria is a global pioneer in payments and financial services.
The statement said, “The Central Bank of Nigeria, in furtherance of a mandate for the stability of the financial system and pursuant to its role in deepening the financial system. hereby issues the Operational Guidelines for Open Banking in Nigeria
“The adoption of Open Banking in Nigeria will foster the sharing of customer pemissioned data between banks and third-party firms to enable the building of customer-focused products and services is also aimed at ensuring efficiency, competition and access to financial services in Nigeria.
“All stakeholders are required to ensure strict compliance with the guidelines and all other regulations, as the CBN continues to monitor developments and issue guidance as may be appropriate.”
The release of the final guideline is a culmination of a long journey for open banking in Nigeria, which started over five years ago when on June 1, 2017, a group of industry veterans, led by Mr Adedeji Olowe, decided that Nigeria needed to lead with payments innovation.
They formed an open banking working group, which became formalized as Open Banking Nigeria. The group engaged with banks, fintechs, CBN, and other international stakeholders.
Early backers of open banking in Nigeria include Sterling Bank, KPMG, PwC, EY, Paystack, TeamApt, Wallet Africa, and OnePipe.
The coalition now expanded to include the likes of Mono, Switch, Lendsqr, Palmpay, Carbon, and Trium.
Subsequently, the CBN released the regulatory framework for open banking in Nigeria on February 7, 2021, which laid the groundwork for an industry committee to create the draft of operational guidelines in May 2022. This draft is what has now become the law for bankers and fintechs supervised by the CBN.
Supporting this is also the Nigeria Data Protection Regulation (NDPR), released in 2019, as data privacy is a foundational pillar for open banking.