Open Banking and its opportunities for Nigeria

What is the story of Okra? What was the inspiration for founding the company?

It started with my co-founder, Fara, moving back to Nigeria and looking to build out different consumer fintech products. She realised there was no way to truly scale products with the technology that existed at the time and started exploring bank integrations as a way to get through this hurdle. We spoke extensively about the potential and explored the business case much deeper – we quickly realised that the infrastructure we were building was the most critical tool needed to open the fintech market on the continent and our thesis directly aligned with our world view on the 4th industrial revolution.

We were keen to learn what are the biggest challenges for Open Banking in Nigeria. What prevents Open Banking to succeed in Nigeria?

The core and probably the most important concept of Open Banking/Finance is about data ownership by consumers. The law in Nigeria is clear (in fine print) around informed consent and data privacy. The global standards are clear as well. We follow this very seriously and make sure our entire business is built on the foundation of informed consent.

The limitation that we saw with the old Open Banking practices (besides the obvious multimillion-dollar cost for banks) was the fact that it would have taken a much longer time to implement, as we learnt from the UK. Through our approach, we made it possible for the service to go live within a year as opposed to 5/6 years. We also felt the need to digitise all aspects of financial services beyond banking.

I’ll argue that the growth opportunity here over the next 5-10 years will be much more exciting than on any other continent on the planet. This is why we believe our work in pioneering Open Finance for the African continent is instrumental.

What do you see as the most promising use cases of Open Banking/Finance in Nigeria, both now and in 2022 or beyond?

Open Finance/API economy is probably the most impactful development in the history of the financial services industry.

One of the mind-blowing facts about this technological breakthrough around data transfer is the fact that it significantly improves the quality of all financial products by an order of magnitude.

When you think about financial services, there are a limited number of use cases. Furthermore, the principles around these use cases remain the same regardless of geography.

When you think about what you use your banks or favourite fintech apps for, the use cases are:

• Payments – spending your money

• Wealth (savings & Investments) – growing your money

• Lending

• Budgeting/planning

• Insurance

These are all very critical use cases, and our Open Finance platform enables businesses to build the best experience across these core use cases for customers. We have the tools to cover the entire stack and we enable bank and fintech developers to seamlessly move into verticals at a pace and scale that simply didn’t exist in the past.

Where do you think businesses can be more innovative as they leverage your Open Finance platform?

Onboarding, financial risk analysis, and collections just to name a few.

However, all businesses, big and small – must apply a mobile/digital-first approach to serving customers. Of course, the focus for us is on financial products. We come in as the platform developers/businesses use to distribute digital financial products to customers. We provide the tools for the developers to seamlessly enable critical processes like customer onboarding, deep credit risk analysis, and more.

Businesses exist to solve problems by delivering quality services to customers. The company that does this the best, in most cases becomes the biggest business. Generally, the more technology (innovation) is applied to the delivery of that services, the bigger the scale of the business.

We all know we hate going to the banks physically to get basic financial tasks done.

Banks and fintechs in Africa must think about technology first and must embrace Open Finance tools that will enable them to compete now and in the long term. This is important because consumers are very unforgiving, we’ve seen it with the likes of Blockbuster, Motorola, Nokia, to name a few.

This interview was originally published inside the Open Banking Report 2021. To download the report, please click here.

About David Peterside

David is a technology entrepreneur and computer scientist with an interest in the global financial markets. Prior to Okra, David worked as a Tech Analyst at UCML Capital.

About Okra

Open Finance platform that enables developers to build end-to-end personalised digital financial products. For example, digital banks, savings & investment apps etc.