The Central Bank of Nigeria (CBN) has approved the operational guidelines to open banking in Nigeria, paving the way for a new era of banking in the country.
The decision was released via an open letter to deposit money banks, mobile money operators and payment service providers.
In the circular, Musa Jimoh, the Director of the CBN’s Payments System Management Department explained: “The adoption of open banking in Nigeria will foster the sharing of customer-permissioned data between banks and third-party firms to enable the building of customer-focused products in services. It is also aimed at enhancing efficiency, competition and access to financial services in Nigeria.”
The final guideline for bankers and fintechs supervised by the CBN comes just under a year after an industry committee created the draft of operational guidelines. Previously, the CBN had released a regulatory framework for open banking in Nigeria in February 2021.
One of the key early backers of the initiative was Open banking Nigeria, which was formed by a group of industry veterans in 2017, initially as an open banking working group with the aim of growing payments innovation in the country.
Another milestone was the Nigeria Data Protection Regulation (NDPR) which was released in 2019, as a key foundational pillar for open banking. This recognised that many public and private bodies had migrated their respective businesses online and that there was a need to regulate and safeguarde this information against personal data breaches.
On granting open-banking approval, Jimoh concluded that all stakeholders would be required to ensure strict compliance with the guidelines while the CBN would continue to monitor developments and issue guidance as appropriate.