The Central Bank of Nigeria has prioritised Open Banking in the development of the Payment Systems Vision PSV 2030 as it considers the concept as one of the top global trends and new practices in payments that have been deployed in other countries which must be considered in Nigeria. According to the apex bank, this is necessary because of the importance of having a strategy that is relevant for the Nigerian market domestically and for regional and global markets where Nigeria plays a role in international flows.
The apex bank revealed this in its Request for Information into the Payment Systems Vision (PSV) 2030 document, which according to the CBN’s Director of Payment System Management, Sam C. Okojere, would “define the strategic agenda for the Payments System for the next ten years.” It comes on the heels of its very successful Payments System Vision PSV2020 that wraps up at the end of 2019.
Other global payments trends identified for consideration in Nigeria’s payments strategy in the next 10 years are new payment methods, digital access, distributed ledger technology, big data and artificial intelligence, cyber-security, digital identity, as well as machine learning and robotics process automation. This is because of the critical need for the PSV2030 framework to recognise swiftly evolving user requirements, technical solutions, regulatory environments and external threats that typify the industry.
The CBN noted that with change in the financial industry driven by rapid advances in technology, customer expectations and new business models (including Fintech), the payments industry has evolved over the past few decades from the early days of electronic payment.
In a related development, Centric Gateway, a frontline fintech that implemented an Open Banking gateway for a leading Nigerian Tier-1 bank, has joined Open Banking initiative—led in Nigeria by the Open Technology Foundation—as a member to drive advocacy for a common Application Programming Interface (API) standard.
Speaking on the development, Niyi Kolade, CEO, Centric Gateway said: In concurrence with our vision of improving financial technology throughout Nigeria, across Africa and around the world by creating innovative solutions that work for the market, our collaboration with Open Technology Foundation would help to not only drive our business objectives but to also help the entire payment services industry to better serve the needs of customers everywhere.”
Open Technology Foundation (OTF), also known as Open Banking Nigeria, was established to drive the development and adoption of Open Banking standards in Nigeria for greater innovation in the financial ecosystem. OTF encourages a system where banks can easily connect with other APIs in the market to extend their service offerings by introducing native fintech solutions in a plug-and-play manner.
Ope Adeoye, a trustee and spokesperson for Open Technology Foundation, speaking on the new membership expressed delight to have yet another set of industry players joining the Open Banking Nigeria initiative. “It is our conviction that soon enough, Open Banking would grow a tap root and more industry stakeholders would strongly advocate and practise it because of its numerous benefits to all across the value chain,” said Adeoye.
Adeoye was also pleased that the CBN as the highest regulator in the industry is playing a lead role in planning for the future. According to him, the Nigerian market has been ready for Open Banking for a long while, the benefits of Open Banking far outweigh the risks, which can adequately be easily mitigated, and that it is impressive the CBN is ready to act to ensure that regulation this time does not lag excessively behind innovation.