The Central Bank of Nigeria (CBN) releases a draft of the Regulatory Framework for Open Banking. The draft is an essential step for creating a standard to show companies how to exchange customer digital financial data. Open banking uses APIs for easy customer data exchange between financial and non-financial companies. The Application Programming Interfaces (API) allow this by acting as digital plugs for requesting and transferring data.
Fintech startups have driven these guidelines to expand financial services and tackle challenges. It will encourage banks, startups, and retailers to share customer data with the customer’s consent. The CBN plans to have consistent APIs, similar to how any debit card can be used on any ATM. Nigeria aims to enhance competition and increase the availability of banking & payment services.
Data are only shared if they are one of the four data levels. These are Product Information & Service Touchpoints (PIST), Market Insight Transactions (MIT), Personal Information & Financial Transaction (PIFT), and Profile, Analytics, & Scoring Transaction (PAST). The draft highlights the necessity of consent from the consumer at critical phases of data exchange. The companies asking for access must abide by the Nigeria Data Protection Regulation and other data ethics requirements.