The Central Bank of Nigeria, CBN has released strict directives for the operation of open banking system in Nigeria.
According to the CBN, the new guidelines will aid financial stability in the country and improve sharing of customers’ data between the banks and firms involved.
The open banking system as practised in the United Kingdom and other countries is a form of safely disclosing a bank customer’s details with third-party organisations or other financial firms with their consent, Investors King understands.
The third-party firm, having received the data from the bank which could include information about the customer’s transactions, account balances and other needed information, uses it to provide useful products and services to meet the customer’s needs.
The CBN, in a circular issued on Tuesday with reference number– ‘PSM/DIR/PUB/CIR/001/043’ by the Director of Payment Services Management Department, Musa Jimoh urged stakeholders to ensure strict adherence to the laid down guidelines for opening banking services.
The circular titled –‘Issuance of operational guidelines for open banking in Nigeria’ assured bank customers of safe information sharing.
The CBN vowed to ensure monitoring of the directive and the data-sharing process in the open banking operation.
As part of the benefits of the adoption of open banking, the apex bank stated that it will improve access to Nigerian financial services and promote effectiveness in the sector.
The CBN circular read partly, “the Central bank of Nigeria in furtherance of its mandate for the stability of the financial system and pursuant to its role in deepening the financial system, at this moment issues the operational guidelines for open banking in Nigeria.
“The adoption of Open Banking in Nigeria will foster customer permissioned data between banks and third-party firms to enable the building of customer-focused products and services. It also aims to enhance efficiency, competition and access to financial services in Nigeria.
“All stakeholders are required to ensure strict compliance with the guidelines and all other regulations, as the CBN continues to monitor developments and issue guidance as may be appropriate.”