The Central Bank of Nigeria (CBN) has announced the issuance of new operational guidelines for Open Banking in the country as part of its regulatory initiatives to enhance the nation’s financial system.
The new guidelines will enable the sharing of customer-permissioned data sharing between banks and third parties such as fintechs and other financial service providers with the consent of customers for the purposes of creating customer-oriented products and services by banks, improving efficiency and global competitiveness of the nation’s financial sector.
A statement issued by the apex bank’s Director, Payments System Management Department, Mr. Musa Jimoh, indicated that the adoption of Open Banking would deepen the financial services and enhance the CBN’s drive towards the nation’s financial system stability.
While urging all stakeholders on strict compliance with the guidelines and other regulatory measures in the banking sector, the apex bank restated its commitment to monitoring developments in the financial system and ensuring that appropriate measures were taken to respond to them as appropriate.
It would be recalled that the CBN had last year issued the regulatory framework for Open Banking in the country as part of its efforts to improve data sharing across the broad spectrum of the payment system to promote innovations and broaden the range of financial products and services for bank customers.
The issuance of the latest guidelines on Open Banking by the CBN, a banking concept which has been gaining acceptance in more developed economies globally, is expected to spur banks and other financial institutions, especially the fintechs, to enhance their services with hybrid of technology-powered products and services for their customers nationwide.
One of the benefits of Open Banking is that it reduces entry constraints for new fintechs by allowing them to access customer-permissioned data through the Application Programming Interfaces (APIs) of existing banks, thereby reducing the need for them to embark on the rigorous and costly Know Your Customers (KYC) procedures.
