Nearly a month after Nigeria’s open banking framework was expected to go live, silence hangs over the rollout. Despite earlier reports pointing to August 1 as the launch date, there has been no official confirmation or denial from the Central Bank of Nigeria (CBN), which oversees the initiative.
The CBN’s silence over a development that many industry stakeholders have touted as potentially more impactful than the Bank Verification Number (BVN) or the cashless policy drive has many worried that the country could cede an opportunity to set the tone for financial innovation on the continent.
Towards an open financial future
In the late 2010s, a small group of industry professionals came together to create Open Banking Nigeria, a non-profit dedicated to developing a common standard for application programming interfaces (APIs) in the country’s financial system.
Their goal was to nudge Nigeria’s financial industry into a new era, one where banks, fintechs, customers, and third-party providers could securely share data to build better products and services.
Through years of advocacy, the group rallied some of Nigeria’s top banks and fintechs to their cause and eventually got the CBN to pay attention.
In 2023, the CBN released operational guidelines for the delivery of open banking in the country. But since then, there has been little else, and with the August 1 launch date now behind us, there is still no indication of when the regulator intends to initiate open banking operations.
What’s responsible for the delay?
One industry stakeholder argues that the delay is more bureaucratic than technical, noting that there’s a disconnect between the priorities of the CBN Governor and those tasked with executing the rollout.
But this misalignment, they say, has become a recurring theme for the regulator in recent times. Initiatives like the eNaira were touted as significant policy drives, but an unenthusiastic response from a populace that, for a long time, could not legally use cryptocurrency has hurt their adoption.
As a result, the CBN, once seen as favourable to financial innovation, has struggled to retain that edge.
“The CBN used to be innovative until the past seven years, but recently, they’ve been doing a lot of things that go nowhere.”
Are banks ready for open banking?
A major concern for many industry analysts has been the technical readiness of the country’s commercial banks, without which open banking would not take off. But stakeholders note that many of Nigeria’s banks have been quietly preparing for years.
Several of the largest banks already offer APIs and generate significant revenue from digital services, like virtual accounts and embedded finance. Wema Bank, Providus Bank, and Sterling Bank, for example, have built strong relationships with fintechs, allowing them to capture deposits and serve customer segments previously inaccessible to them.
But the current ecosystem is fragmented, with each institution developing its own standards, making it harder to scale solutions and slowing innovation.
“Right now, banks already offer APIs, and the major banks are making solid revenue from them, but the problem is that everyone does it their own way. One thing open banking will do is standardise everything.”
Despite some infrastructure gaps, the consensus is that banks could become fully open-banking-ready within a few months if the CBN were to provide a clear mandate and firm enforcement timelines.
Why it matters: Lessons from the UK and Brazil
Globally, open banking is no longer a theoretical concept. In the UK, where the Financial Conduct Authority mandated open banking in 2018, 75% of businesses surveyed in a Mastercard report are plugged into open banking. It’s driven the emergence of budgeting tools, credit assessment platforms, and lending solutions tailored to user behaviour.
In Brazil, open banking was rolled out in phases beginning in 2021, with support from the country’s central bank. Within two years, Brazil progressed toward a broader open finance framework that included insurance, pensions, and investments. The impact has been significant, as traditional banks have been forced to improve product offerings, while fintechs have gained access to previously unavailable customer data to build more inclusive tools.
Nigeria, by contrast, risks being left behind, not because of a lack of talent or infrastructure, but because of institutional inertia.
A missed opportunity for leadership in Africa
For much of the past 15 years, Nigeria’s financial sector has played a leading role not just on the continent but globally, with projects such as the Nigeria Inter-Bank Settlement System (NIBSS) showing a consistent bias for innovation. In addition, a cashless policy push in the early 2000s birthed mobile money operators such as OPay and PalmPay, helping to bring millions into the financial ecosystem.
Many industry watchers believe open banking could have a similarly transformative effect if implemented properly.
“If we don’t do open banking, we’ll never get the benefits. Look at NIN. Nigeria was working on national identity for so long with nothing to show for it. Buhari came around and enforced it, and there was so much sanity in the market. Similarly, when BVN was done, bad identity became a thing of the past, and everybody started building solid products.”
Open banking, they argue, holds the same potential to unlock new layers of value through increased competition, better financial products, and data-driven personalisation.
Crucially, it would also strengthen consumer protection. By giving individuals more control over their financial data, open banking creates accountability, reduces fraud, and enables portability across service providers, forcing institutions to compete on quality rather than customer lock-in.
A future still within reach
Despite frustrations, most stakeholders still believe in the promise of open banking. While the CBN’s current silence remains puzzling, experts say it’s not too late to reassert leadership. A revised launch calendar, detailed timelines for compliance, and official communication from the regulator would go a long way to assuage the worries of many entrepreneurs and investors.
But until that happens, Nigeria risks turning a potentially transformative reform into yet another example of unfulfilled ambition.
