The Central Bank of Nigeria (CBN) has issued operational guidelines for Open Banking in the country.
In a circular referenced: PSM/DIR/PUB/CIR/001/043 and dated March 7, 2023, the apex bank said the guidelines would create greater access to customer-focused data sharing between banks and third-party firms.
Titled, “Issuance of Operational Guidelines for Open Banking in Nigeria”, the circular signed by the Director, Payment Services Management Department, Musa Jimoh, said the guidelines are in furtherance of CBN’s mandate to ensure stability in Nigeria’s financial system.
The circular reads: “The Central bank of Nigeria (CBN) in furtherance of its 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 customer permissioned data between banks and third-party firms to enable the building of customer-focused products and services.
“It is also aimed at enhancing 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.”
Open Banking enables the sharing of customer-permissioned data between banks and third-party firms. This system allows banks to securely share their customer data with third-party companies, such as fintechs and other financial service providers, with the consent of their customers.
This sharing of data is done through Application Programming Interfaces (APIs), which act as a bridge between the bank’s systems and those of the third-party firms.
Once a customer gives their consent for their data to be shared, the third-party firm can access their data through the bank’s APIs. This data includes information about the customer’s transactions, account balances and other relevant information. The third-party firm can then use this data to develop innovative products and services that are tailored to the customer’s needs.