Let’s start with what we all know: Open Banking in Nigeria hasn’t officially gone live yet. But something has shifted. Over the past few years, Nigeria has made meaningful progress toward open banking. Banks, fintech startups, and regulators are collaborating more closely, driven by the Central Bank of Nigeria’s regulatory framework for open banking and the broader adoption of API standards across financial services. But while open banking is starting to take root, the broader and arguably more transformative movement remains relatively underexplored in Nigeria’s policy and business conversations.
Globally, Open Finance is the next frontier. It builds on the principles of open banking but goes several steps further by enabling consumers to share a much wider range of financial data, from insurance claims and pension contributions to investment portfolios and even asset ownership records, with third-party providers.
Countries like Australia have legislated consumer data rights across sectors; the UK is developing Open Finance roadmaps; At its core, Open Finance is about giving individuals full control over their financial data, empowering them to access better financial products, more personalised services, and fairer pricing. It also creates opportunities for startups and financial institutions to build innovative tools that were previously impossible in siloed financial ecosystems.
For Nigeria, the promise of Open Finance is particularly significant. Despite gains in digital banking, a large percentage of the population remains without access to comprehensive financial services. Access to affordable credit, insurance, pensions, and wealth management products is still highly uneven. Traditional credit scoring models often exclude millions due to a lack of formal banking history. Without broader access to diverse financial data, efforts to deepen financial inclusion and build a resilient financial ecosystem may stall.
What is Open Finance?
Think of it this way: if open banking is a window into your bank account, Open Finance is a glass house. It’s about letting consumers decide who gets access to their broader financial data. That includes credit history, insurance claims, pension records, mutual fund balances, stock portfolios, the full picture.
This data is accessed through APIs, with your consent, and it allows third parties to build tools and services tailored to your needs. Want a personal finance app that helps you track your spending, suggests cheaper insurance plans, and tells you whether you’re on track for retirement? That’s Open Finance. Want to apply for a mortgage and skip the endless paperwork because your lender already has access to verified data across your financial life? That’s Open Finance, too.
The point is: Open Finance makes financial services smarter, more personalised, and a lot more useful.
Nigeria should be paying attention
Nigeria’s financial system presents a mix of advancements and challenges. While there are sophisticated banking products, a large portion of the population remains unbanked or underbanked. Access to credit and wealth-building tools is limited, and data interoperability across financial institutions is minimal.
Open Finance could help address these challenges by offering better access to credit, simplifying wealth management, and improving financial inclusion.
Despite progress in open banking, Nigeria is not yet ready for Open Finance. The Central Bank of Nigeria (CBN) has made notable progress, but other financial regulators, such as the Securities and Exchange Commission (SEC), National Pension Commission (PenCom), and National Insurance Commission (NAICOM), have not aligned their efforts.
Successful implementation of Open Finance in Nigeria would require coordinated action among all regulatory bodies, possibly driven by leadership at the federal government level.
In the UK, the Financial Conduct Authority (FCA) has already laid the groundwork for Open Finance. In Australia, the Consumer Data Right (CDR) framework made it mandatory for companies to allow consumers to port their data across industries. In the US, we’re seeing a shift from market-driven data sharing to more government-mandated initiatives.
What these markets have in common is that they recognised a simple truth early on. Financial services aren’t just about banks. And if you want to give consumers control over their money, you have to go beyond banking.
Nigeria can take a cue from that.
Spotlight read: Will Nigeria use FAPI for authentication?
So what would Open Finance actually look like in Nigeria?
Lending: Today, lenders rely on credit bureau data and, sometimes, bank statements to assess creditworthiness. But what if they could also see your pension contributions, insurance history, and investment portfolio? That’s a much richer credit profile.
Insurance: Imagine applying for health insurance and the provider already has access to your medical payments and spending habits (with your permission, of course). They can build a better policy, price it fairly, and make the claims process smoother.
Pensions: Many Nigerians struggle to access or even track their pension balances. Open Finance could change that by allowing individuals to view and manage their pension accounts within everyday apps, enabling better planning for retirement.
Investments: From mutual funds to stocks, investment products are often siloed within specific platforms. Open Finance would make it possible for users to view and manage their holdings across different providers in one place unlocking better financial advice, consolidated reporting, and smarter decision-making.
Personal finance management: For everyday users, Open Finance would mean better financial advice, customised tools, and fewer surprises. Think budgeting apps that actually work because they have all your data, from rent to savings to that random side hustle.
Business use cases: SMEs could benefit from real-time dashboards that connect their POS systems, tax records, payroll data, and banking activities. This would simplify tax filing, improve access to loans, and help them manage cash flow.
Spotlight read: Important things to know about the API standard for open banking in Nigeria
What needs to happen next?
Before Open Finance can even be considered a reality in Nigeria, Open Banking itself must first be fully adopted and operational across the ecosystem. Until banks, fintechs, and regulators alike have embraced Open Banking in practice, any conversation about Open Finance will be premature. But assuming Open Banking reaches full momentum, a few critical steps need to happen next.
First, cross-regulatory coordination must be established. The Central Bank of Nigeria (CBN) alone cannot drive Open Finance. There needs to be a unified, cross-agency policy that aligns all players under one vision. Second, data standardisation across sectors is essential. Just as Open Banking APIs follow a common technical standard today, similar consistency must be applied across other systems. For instance; pensions, insurance, investments, and tax systems to enable interoperability. Third, there must be clear legal backing. Nigeria will need a law or regulation that explicitly gives consumers the right to control and share their financial data, while also mandating providers to comply. Without this legal framework, Open Finance cannot be truly enforceable.
Security and trust will also be non-negotiable. Nigerians will only opt in if they believe their data is genuinely safe. Strong rules around consent, data storage, usage limits, and liability must be put in place and strictly enforced. Finally, public awareness will be key. Nigerians need to understand not only what Open Finance is, but also how it benefits them and just as importantly, what they risk missing out on if they choose not to participate.
Financial services don’t stop at banks…
We’ve already seen how open banking is shifting the conversation in Nigeria. But stopping there would be shortsighted. Financial services don’t stop at banks and neither should innovation. Open Finance is about building a financial system where everyone’s data works for them, not against them.
If Nigeria gets it right, Open Finance could do for the average Nigerian what years of isolated innovation couldn’t. It will deliver real financial inclusion, improve transparency, and create opportunities that touch every part of our lives. Now is the time to start that conversation.
