On February 17, 2021, the Central Bank of Nigeria issued the new Regulatory Framework for Open Banking in Nigeria. The framework lays the basic foundation for data sharing between the Nigerian banking and payments ecosystem. It was welcome news. Open Banking will set the common standards, compliance and technology specifications that allow more competition, and innovation in the financial industry.
But what does it all mean? Why does it matter?
Here's a quick question. How many bank accounts do you have? You probably have more than one. One is your primary account, and the other bank account is your backup account, in case there's a problem or a network failure with the first bank. You have multiple banking and fintech apps, from Kuda, GTBank to Cowrywise, that manage everything from savings, transfers, loans, to investing. You're not peculiar. Many Nigerian smartphone users are probably doing the same. In a previous