In a draft document that became public on May 18, the Central Bank of Nigeria (CBN) proposed guidelines that would usher in an ‘open banking‘ era in the country, a key step in creating a standard for how companies exchange digital financial data belonging to consumers.
Most notably adopted in the UK, open banking is the idea that the easy exchange of consumer data between financial and non-financial companies, with consumers’ consent, is necessary to create more useful and competitive consumer services. Data is exchanged through application programming interfaces (APIs)—software programs that act as digital plugs for requesting and transferring data.
More services would invite more people into the financial system, growing the economy and quality of life. For example, retailers like Jumia that meet regulatory requirements can connect to a bank’s customer data (at an agreed fee) to get information that could inform buy-now-pay-later decisions or new services. Same applies for banks seeking retailer customers’ data.
Originally published on Quartz : Original article