The regulatory framework for Open Banking in Nigeria has been issued by the Central Bank of Nigeria in its efforts to enhance competition and innovation in the banking system.
This was disclosed in its ‘Operational guidelines for open banking in Nigeria’ released in May 2022.
The guidelines said, “The Central Bank of Nigeria, hereafter called the Bank, had issued the regulatory framework for open banking in Nigeria in its efforts to enhance competition and innovation in the banking system.
“The Bank recognised the existence of an ecosystem for Application Programming Interface in the banking and payments system and is aware of various efforts in the industry to develop acceptable standards among stakeholders.”
The CBN said open banking promotes innovations and broadens financial products and services, which involves sharing of customer data and interconnectivity of systems, therefore, exposing the participants to risks such as cybersecurity, money laundering, regulatory and compliance, contract management, and product management among others, adding that offers benefits and opportunities to the financial sector but is accompanied with risks that could undermine the objectives if not properly managed.
According to the CBN, the framework established principles for data sharing across the banking and payments system to promote innovations and broaden the range of financial products and services available to bank customers.
As a result, it added, 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.
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