Some countries built functional open banking systems without forcing every bank to participate. Singapore is one of the most cited examples in this case. Rather than imposing compulsory access rules, the Monetary Authority of Singapore published non-binding API playbooks and encouraged the industry to coordinate on its own terms, and it worked. The banks built their APIs, fintechs connected, and adoption moved forward without a single legal mandate compelling anyone to open up.
So why not follow the same path in Nigeria?
Well, what worked in Singapore depended on conditions that Nigeria does not yet have. And the countries that look most like what Nigeria is trying to build, in terms of scale, complexity, and the depth of the problem being solved, got there through mandates. This is not really about whether mandates are philosophically right or wrong. The more practical issue is what kind of foundation Nigeria’s open banking system needs to work reliably, and whether a voluntary approach can realistically build it.
Voluntary adoption is a bet on incentives.
The case for voluntary open banking rests on the idea that banks will open up because they have to. Customers will demand to share their, fintechs will apply pressure, and institutions that refuse to participate will lose relevance. Singapore fits this logic. It has a small, highly banked population, a concentrated financial sector where major players already had mature API infrastructure, and a regulator with enough informal authority to steer outcomes without writing them into law. When the MAS published its API Playbook in 2016, the banks were already moving in that direction so the slight nudge was just enough.
Nigeria’s reality is different in almost every dimension.
Roughly 36.8% of Nigerian adults remain unbanked. Millions more are underbanked or only intermittently served. Most consumers are not yet asking to share their data or see all of their bank accounts on one screen. A lot of us are still trying to understand why a transfer can fail and still debit us. When customer demand is that low and the supporting infrastructure for identity, consent, and dispute resolution is still being built, voluntariness will not pull open banking into existence. Our banking sector itself tells the same story. Nigeria is not a handful of well-resourced institutions operating in a compact market. It is a mix of commercial banks, microfinance banks, fintechs, mobile money operators, and payment service providers with wildly different levels of technical maturity. In this kind of environment, voluntary adoption reliably produces unevenness. Some institutions will move fast while others will wait or slowly test the waters.
What actually happens when participation is optional
The pattern has repeated across markets, and it shows up clearly in our own experience with industry coordination.
Everyone will support open banking publicly but drag their feet privately.
Implementing open banking properly will require serious investment from every participant involved. It would mean building secure authentication flows, consent capture and revocation, monitoring, incident response, third-party onboarding, and a customer support reality where disputes do not bounce endlessly between institutions. This is a long, expensive and time-consuming list of requirements. When all of that is optional, it competes with problems that are immediate and punishing; fraud losses, operational instability, core banking upgrades, the day-to-day burden of keeping channels alive. Even well-run institutions triage.
We will end up with a patchwork of private corridors, not “open banking”
If a few institutions open up and others do not, innovators will still need to build products. So they will do what builders always do, route around the blockage. They would negotiate one-off integrations and build separate implementations per institution, then spend the next few years maintaining them as each bank changes formats, downtime patterns, and security requirements. The market ends up with some level of connectivity, but without interoperability. A consumer should not have to wonder whether their bank is one of the good ones before a product works for them, nor should a fintech need a bespoke technical relationship with every institution to offer a basic service nationally. Nigeria has already lived some version of this. Before the CBN’s regulatory framework, fintechs like Mono and Okra, were already doing the work of connecting fintechs to bank APIs. They proved that the demand exists. But they also showed how fragmented and fragile the plumbing becomes when there is no shared standard or obligation backing it up.
When things go wrong, accountability would become a negotiation.
Open banking expands the number of actors in a customer journey. In a voluntary ecosystem, what happens when data is misused, or a customer is harmed through a third-party flow? All of that becomes something to argue about after the fact rather than something the framework already settles. In Nigeria, where trust is already so fragile, this is a problem with dire consequences. When something goes wrong with a financial product, most people do not file a complaint and wait patiently. They stop using the product entirely. Unclear accountability would set us back before the benefits ever see the light of day.
How the UK and Brazil approached this differently
Two markets are worth looking at closely as evidence of what happens when regulators choose to mandate participation.
The UK went direct.
In 2016, the Competition and Markets Authority concluded that the largest banks were not competing hard enough for customers. In the following year, the CMA ordered the nine largest banks and building societies (collectively holding over 90% of personal and business current accounts) to implement open banking to a shared standard. They were required to set up and fund an implementation entity, adopt common API specifications, and meet a defined roadmap with regulatory oversight. The process was not without its pain as some banks struggled with compliance, several others were publicly cited for breaches, and the implementation entity itself faced governance challenges that required an independent review. But by 2024, the CMA confirmed full completion of the roadmap. Over six million consumers and a significant portion of small businesses were actively using open banking services. The ecosystem was valued at over £4 billion and is now transitioning to a broader regulatory framework under a Joint Regulatory Oversight Committee.
Brazil mandated implementation with a different approach.
The Central Bank mandated participation for the largest banks and institutions in its two biggest prudential segments and made it voluntary for everyone else. Implementation rolled out across four phases starting in early 2021: first product data, then customer data sharing, then payment initiation, and finally a broader expansion into insurance, pensions, and investments. The first two phases were mandatory for the largest banks. The later phases were voluntary for all authorized institutions. The results were comparatively striking. Brazil reached five million connected accounts in under a year, a feat which took the UK four to five years to achieve. By early 2023, 22 million customers had consented to share their data. By 2025, the system had over 43 million active consents and more than 800 participating institutions. Brazil has since evolved from open banking into full open finance, and the Central Bank continues to expand mandatory requirements, including recently making certain payment APIs compulsory for all participants.
What matters for Nigeria, especially at this early phase, is not the numbers themselves but the design logic. Brazil did not mandate everything for everyone immediately. It mandated participation from the institutions whose absence would have made the system irrelevant, then let scale and network effects draw in the rest.
Nigeria’s framework already points toward a mandate.
We’re not starting from scratch on this question. The regulatory architecture already assumes mandatory participation.
The CBN issued its Regulatory Framework for Open Banking in 2021 and followed with operational guidelines in March 2023, making Nigeria the first African country with defined open banking regulation. The framework establishes a tiered system that matches data access to licensing status and risk management maturity. It requires a centralized Open Banking Registry through NIBSS, a consent management system tied to Bank Verification Numbers, and standardized APIs across all participants.
The industry has been doing its part too. Five workstreams covering governance, legal compliance, technical infrastructure, data security, and stakeholder engagement completed their deliverables in 2025. Those implementation documents are now with the CBN for final review, and the industry expects a phased go-live. The foundation is regulatory-led. The CBN has not left this entirely to market coordination. What remains largely unresolved is the enforcement posture. How firmly will the obligation be applied? On what timeline? With what consequences for institutions that fall behind?
Spotlight read: What regulators must get right before go-live
Our final thoughts
Open banking participation should be mandatory in Nigeria. This position is grounded in how institutions behave when given the choice and what the evidence from other countries consistently shows. Voluntary adoption, for all its appeal on paper, does not hold up against the reality of how this market works.
Mandating open banking does not have to mean mandating everything at once for everyone. Nigeria’s ecosystem is tiered, and capabilities vary widely. If the country mandates the full scope on every institution simultaneously, it would likely produce performative compliance and security gaps that could set the whole idea back. We can start where coverage and capability already exist and expand scope over time. In reality, that means major deposit-taking institutions and established payment service providers. These are the institutions whose data covers the widest share of the population. Without them participating in good faith and on schedule, the ecosystem cannot reach critical mass.
