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Data Security: CBN releases operational guidelines on open banking

*The Central Bank of Nigeria explains the operational guidelines outline the procedures governing how banks and other financial institutions are permitted to access and manage customer data in the country’s banking system

Isola Moses | ConsumerConnect

The Central Bank of Nigeria has released the operational guidelines for open banking in the West African country.

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

Musa Jimoh, Director of Payments Services Management Department at CBN, in a memo, stated that 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 consumers.

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

The CBN also disclosed the guidelines were in furtherance of its mandate to ensure stability in the Nigerian financial system.

The guidelines also noted the Bank 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.

It equally outlines 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 memo stated: “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.”

Jimoh as well stressed the benefits of adhering strictly to the guidelines and other regulations.

He said they were aimed at promoting innovation and expanding the range of financial products and services available to bank customers.

The CBN urged all stakeholders to prioritise compliance so as ensure the success of the open banking system.

The guidelines are specifically targeted towards banking and other related financial services, as determined and classified by the apex bank within the regulatory framework for open banking in Nigeria, Jimoh stated.

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