To safeguard the stability of the country’s financial system, the Central Bank of Nigeria has released operating rules for open banking in Nigeria. In a circular titled “PSM/DIR/PUB/CIR/001/043” and dated March 7, 2023, the apex bank stated that the rules will increase access to customer-focused data exchange between banks and other companies.
The “Issuance of operational guidelines for open banking in Nigeria” circular, which was signed by the Director of Payment Services Management Department, Musa Jimoh, said that the rules were a requirement of the Central Bank’s duty to guarantee financial stability in Nigeria.
The circular instructed all parties involved to make sure the rules and other requirements were strictly followed. The circular read, “The Central bank of Nigeria in furtherance of its mandate for the stability of the financial system and pursuant to its role in deepening the financial system, at this moment 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 also aims to enhance 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.”
The exchange of customer-permitted data between banks and other companies is made possible by open banking. With the cooperation of its consumers, this method enables banks to securely exchange their customer data with third parties, including fintech firms and other financial service providers.
It is now used in the United Kingdom and is spreading over many other nations. Application Programming Interfaces, which serve as a link between the bank’s systems and those of the outside companies, are used for this data exchange.
Once a customer gives consent for data to be shared, the third-party firm can access thei 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.
