The guideline was released via a circular by Musa Jimoh, the Director of the CBN’s Payments System Management Department on 7 March 2023. The Open Banking regulation would usher in a transformation time for financial innovation and financial inclusion in Nigeria and Africa as a whole.
The release of the final guideline is a culmination of a long journey for Open Banking in Nigeria. On 1 June 2017, a group of industry veterans decided that Nigeria needs to accelerate its payments innovation industry and formed an Open Banking working group which ultimately 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 has now expanded to include the likes of Mono, Switch, Lendsqr, Palmpay, Carbon, and Trium.
Subsequently, the CBN released the regulatory framework for Open Banking Nigeria on 7 February 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) which was released in 2019 as a data privacy. It is now considered a foundational pillar for Open Banking. While waiting for Open Banking fintechs such as Mono, Okra, Stitch (all members of the Open Banking Nigeria coalition) have gone ahead to create innovative hacks. But their days of pain are over, as per the press release. They will now be able to provide the industry with more enriched data than is currently available.
Over the next few days, Open Banking Nigeria will provide more insights into what the next steps for banks would be and fintech in meeting up with the CBN standards and requirements.
Starting with July 2022 the Central Bank of Nigeria demanded banks and other financial institutions in Nigeria to embrace opportunities represented by Open Banking to drive financial inclusion in the country.
The CBN said that banks and other financial institutions were already attuned to all the various technology changes within this space. The financial service sectors would adjust to the continued transformation of fintech space, as they had always shown resilience and preparedness to respond quickly to emerging issues.
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