Insights, Banking & Finance

Open Banking in Nigeria: Legal Considerations for Data Sharing in Financial Services

Data is considered one of the most valuable assets in the world today. The amount of data being collected has grown exponentially with the rapid growth of digital technologies and the interconnectedness of various industries. According to the Economist, 97% of businesses use data for revenue growth. The whole concept of open banking leverages the use of customers’ financial data by third-party providers to personalize the customers’ banking experience and create solutions and services. Data sharing must be governed by strict privacy and security measures to protect the confidentiality and integrity of customer information.

Traditionally, banks and financial institutions manage and retain customers’ financial data, but with open banking, customers can manage their information by consenting to share the information with third-party companies. Nigeria joined the open banking space with the release of the Central Bank of Nigeria (CBN) Operational Guidelines for Open Banking, which outlines the framework for sharing financial data and establishes regulatory standards. This article explores key aspects of the CBN Guidelines in promoting and protecting financial data sharing in open banking and makes recommendations to enhance the effectiveness of open banking in Nigeria…

 

 

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