Opening the door to financial inclusion in Nigeria.
On Wednesday, 24th of February, 2021, Open Banking Nigeria held a conference to discuss the theme “Open Banking as a key driver for financial inclusion in Nigeria.” Speakers at the event were:
- Ade Bajomo – ED Information Technology and Operations, Access Bank
- Ronke Kuye – CEO Shared Agent Network Expansion Facilities Limited (SANEF)
- Uzoma Dozie – CEO Sparkle Bank
- Carlos Figueredo – CEO and Founder, Open Vector UK
- Kosta Peric – Deputy Director, Financial Services For The Poor, Bill And Melinda Gates Foundation
- Musa Jimoh – Director, Payment Systems Management Department, Central Bank Of Nigeria (Keynote Speaker)
- Khadijah Abu – Host
The conference brought these speakers together to discuss the importance of financial inclusion and the roles Open Banking, Banks and Fintechs play in this ecosystem to facilitate higher financial inclusion in the country.
One major highlight was the stats revealing that over 50% of Nigerian adults (18 and above) don’t have access to basic financial services despite the efforts of the Central Bank of Nigeria and other financial bodies to increase access to these services.
A solution to this problem would be introducing Open Banking standards to the financial industry. These standards compel banks to share customer transaction data with Fintechs and other third-party providers, with the customer’s express consent.
In his keynote address, speaker Musa Itopa Jimoh said Open Banking has the potential to “fundamentally change the value chain, competitive landscape and customer experience especially in retail banking.”
Responding to a question asked by Open Banking Trustee, Khadijah Abu, on measures the CBN would employ to ensure a smooth transition to open banking nationwide, Mr Jimoh responded saying, “we need to cooperate closely with major stakeholders of the open banking ecosystem to develop API standards that everyone must meet.”
He also mentioned the creation of a registry of licensed entities, to participate in open banking, that would be run by the central bank to mitigate risks and curb cyber misconduct.
Ope Adeoye, CEO of OnePipe and a Trustee of Open Banking Nigeria discussed the root problems of unprofitability many commercial banks faced in rural areas and how it hindered financial inclusion in those areas, as there was little to no return on investments for those banks.
He further explained how Open Banking solves this problem, “In the advent of open banking, all groups that are able to reach people at the grassroots would be able to take financial services from the banks and manage to get it to the vulcanizer in Kontagora. The infrastructure required to make that happen is only achievable when it is possible for such communities to be able to tap into a uniform layer of distribution from different banks.”
Kosta Peric added to Mr Adeoye’s deductions, highlighting the three key issues adopting an open system solves which are, enabling access of the poor to bank accounts and wallets, ensuring its usage and solving the problem of gender inequality to give women access to more financial services.
While other speakers touched on different aspects of Open Banking, all speakers emphasised the need for reliable technological innovation to support the adoption of open banking systems.
Ronke Kuye, explained that the best and easiest way to deepen financial access in the country is through agency banking, she attributed it to being the inspiration behind the core fucntion of SANEF. She also emphasized the importance of 24 hours availability and convenience of these banking services.
The conference was rounded up with numerous contributions from all the speakers but the most important question the conference answered was “can open APIs provide an additional boost to bring financial services to the excluded?”
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