CBN Issues Operational Guidelines On Open Banking

CBN Issues Operational Guidelines On Open Banking

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

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

Open banking is a financial services concept that allows third-party financial service providers to access banking data, typically through application programming interfaces (APIs), with the explicit consent of the customers.

It basically allows customers to share their banking data with other financial service providers, enabling them to access a wider range of products and services.

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

According to the guidelines, the CBN is required to establish and manage an Open Banking Registry that will serve as a regulatory oversight tool for participants in the open banking ecosystem.

This registry is also designed to enhance transparency and provide a means for regulating operators within the system.

The guidelines also outline a 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 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,’’ the memo shows.

Mr Jimoh emphasised the importance of adhering strictly to the guidelines and other regulations, as they are aimed at promoting innovation and expanding the range of financial products and services available to bank customers. He called on all stakeholders to prioritise compliance to ensure the success of the open banking system.