CBN issues operational guidelines on open banking

At Central Bank of Nigeria Wednesday issued operational guidelines for open banking in Nigeria.

The operational guidelines describe the procedures that govern how banks and other financial institutions are allowed to access and manage customer data.

Open banking is a financial service concept that allows third-party financial service providers to access banking data, usually through an application programming interface (API), with the express consent of the customer. It basically allows customers to share their banking data with other financial service providers, allowing them to access more products and services.

In a memo signed by the director of the payment services management department at the CBN, Musa Jimoh, the apex bank said the guidelines are in addition to its mandate to ensure the stability of the country’s financial system.

According to the guidelines, the CBN should establish and manage the Open Banking Registry which will serve as a regulatory oversight tool for participants in the open banking ecosystem. This registry is also designed to improve transparency and provide a means to manage operators in the system.

The guidelines also outline the Consent Management framework, which mandates that customers must provide explicit consent before their data can be accessed for open banking products and services, among other uses.

“The adoption of open banking in Nigeria will promote the sharing of customer-enabled data between banks and third-party companies in order to build customer-centric products and services.

“It also aims to improve efficiency, competition, and access to financial services,” the memo showed.

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Mr. Jimoh emphasized the importance of strictly following the guidelines and other regulations, as the aim is to promote innovation and develop the variety of financial products and services available to bank customers. He urged all stakeholders to prioritize compliance to ensure the success of the open banking system.

He noted that the guidelines are specifically targeted at banking and other related financial services, as defined and classified by the apex bank in the regulatory framework for open banking in Nigeria.