Central Bank of Nigeria (CBN), has issued operational and governance rules on Open Banking (OB) concept with the hope that the robust framework will deepen financial inclusion and ensure that consumers are protected.
Open banking refers broadly to data sharing by operators of the financial system in providing innovative products and services to the market.
The 67-page regulation also covers thematic areas such as consent management, data access rules, key performance indicators (KPIs), anti-competition rules, data ethics, data privacy, shared information framework, data verification process and information security.
The Central Bank said the era would deepen the country’s financial inclusion and create incentives for the development of relevant financial service technology.
Note that aside from the CBN, the Nigeria Data Protection Regulation and the Corporate Affairs Commission (CAC) will be critical to the enforcement of the rule-based interface among the participants and data owners. They will be overseeing compliance with data governance rules and API providers who are expected to act responsibly.
On data governance, the regulation states: “The Bank shall provide data oversight and governance for open banking information assets for participants in the open banking arrangement to ensure compliance with relevant legal and regulatory provisions.
Critical to the governance framework is the proposed Open Banking Registry (OBR), a public repository for details of registered participants to be managed by the CBN.
According to the document, OBR would provide regulatory oversight on participants, enhance transparency in the operations of OB and ensure that only registered institutions operate in the ecosystem.
“Each participant shall be identified by its CAC business registration number, which shall be the unique key across the OBR system. The OBR shall maintain an API interface, defined within these guidelines, which shall serve as the primary means by which API (Application Programming Interface) providers manage the registration of their API consumers,” the CBN disclosed.
Specifically, the guidelines include: “The Regulatory Framework for Open Banking in Nigeria 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, 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 to access innovative financial products and services.”
