CBN Issues Guidelines For Open Banking In Nigeria To Enhance Financial Services

What you should know

• In the banking business, open banking is a driving force of innovation. Open banking, which relies on networks rather than centralized, can assist financial services consumers in safely sharing their financial data with other financial organizations.
• The API may also analyze consumer transaction data to recommend the best financial goods and services for them, such as new savings account with a greater interest rate than their existing savings account or a different credit card with a lower interest rate.
• Open banking can transform the banking industry’s competitive landscape and user experience by allowing more personalized financial products and services to be offered.
• Open banking could enable lenders gain a more accurate picture of a consumer’s financial status and risk level by using networked accounts, allowing them to provide more profitable lending terms. It may also assist consumers in obtaining a more accurate picture of their own finances before to incurring debt.
• Open banking may provide consumers with easier access to financial data and services while also reducing expenses for financial firms.
• However, it may offer significant threats to financial privacy and the security of individuals’ finances, as well as responsibilities to financial institutions.