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May 03.2025

2 Minutes Read

Nigeria Set to Launch Open Banking in August 2025: What This Means for Consumers

Official addressing Nigeria open banking launch press conference.

Nigeria’s Financial Revolution: Open Banking Set to Launch

In a landmark decision, Nigeria’s Central Bank (CBN) has approved the much-anticipated launch of open banking, paving the way for the sharing of customer data among financial institutions by August 2025. This move not only marks Nigeria as the first African nation to adopt open banking practices but also represents a significant shift in the financial landscape of the country. The decision comes four years after the initial regulatory framework was proposed, highlighting the evolving nature of Nigeria's banking system and its readiness for innovation.

Empowering Consumers Through Data Control

Open banking will empower Nigerian consumers by allowing them to share their financial data, such as transaction histories and spending patterns, with regulated financial institutions. This data sharing will be facilitated through a standardized Application Programming Interface (API), ensuring a secure and seamless exchange of information. Importantly, customers will retain control over their data through a consent management framework linked to their Bank Verification Numbers (BVNs). This development is crucial, as it fosters trust between banks and consumers, differentiating Nigeria’s model from those of other countries.

The Potential of Enhanced Lending Services

One of the most promising outcomes of open banking is the potential for improved lending services. With access to comprehensive data on approximately 120 million bank customers, financial institutions will be better equipped to offer personalized lending options, which have historically faced barriers in Nigeria. Currently, a staggering 70% of bank account holders are excluded from credit opportunities due to traditional banking practices that limit access based on inadequate data. Open banking could pave the way for fintechs to enter the credit market with more accurate assessments of borrowers' creditworthiness, potentially reducing the prevalence of subprime loans and predatory lending practices.

As Nigeria prepares to embrace this transformative financial framework, it raises pertinent questions about the broader implications for the banking industry and consumer rights. While challenges remain, particularly concerning the integration of data sharing systems, the potential benefits of open banking—ranging from improved financial products to increased accessibility—represent a significant step towards a more inclusive economy.

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Nigeria Set to Launch Open Banking in August 2025: What This Means for Consumers

Nigeria’s Financial Revolution: Open Banking Set to Launch

Empowering Consumers Through Data Control

The Potential of Enhanced Lending Services

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