The Central Bank of Nigeria (CBN) has issued operational guidelines for open banking in Nigeria.
This was contained in a directive with file number PSM/DIFt/PUB/CIR/001/043 issued on Thursday, entitled “Circular to all deposit money banks, mobile money operators and payment service providers; issuance of the operational guidelines for open banking in Nigeria”, signed by the Director of Payments System Management Department, Musa I. Jimoh, dated March 7, 2023,
The apex bank stated that the move is in furtherance of its mandate for the stability of the financial system and pursuant to its role in deepening the financial system.
Open banking recognises the ownership and control of data by customers of financial and non-financial services, and their right to grant authorisations to service providers for the purpose of accessing innovative financial products and services.
Its applicability includes Agency Banking, Financial Inclusion, Know your customer (KYC), credit scoring/rating etc.
These Guidelines are anticipated to drive competition and improve accessibility to financial and payments services.
The adoption of the Operational Guidelines for Open Banking in Nigeria, it said, will foster the sharing of 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,” the directive noted.
The Bank, in collaboration with industry stakeholders, developed Operational Guidelines for Open Banking in line with the provisions of the Regulatory Framework. In view of this, the Bank hereby issues the Operational Guidelines for Open Banking in Nigeria.
Entities participating in Open banking are categorised based on the following roles:
i. API Provider (AP): This refers to a participant that uses API to avail data or service to another participant. An API Provider can be a licensed financial institution/service provider, a Fast-Moving Consumer Goods (FMCG) Company or
other retailers, Payroll Service Bureau etc.
ii. API Consumer (AC): This refers to a participant that uses API released by the (API) providers to access data or service. An API Consumer can be a licensed financial institution/service provider, an FMCG or other retailers, Payroll Service Bureau etc.
iii. Customer: This refers to the data owner that shall be required to provide consent for release of data for the purpose of accessing financial services.
The objectives of the Open Banking Operational Guidelines include:
- Provide clear responsibilities and expectations for the various participant categories
- Ensure consistency and security across the open banking system
- Stipulate safeguards for financial system stability under an open banking regime
- Promote competition and enhances access to banking and other financial services
- Outline minimum requirements for participants.
The full details of the 68-page Operational Guidelines can be read here. Read more.
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