The Central Bank of Nigeria, CBN has cautioned commercial banks in the country against sharing customers information with another party without their permission. The CBN said banks must take necessary measures to protect customers’ data from falling into wrong hands.
The directive which also affects Financial Technology firms, fintechs, the apex bank said, is to enhance data sharing across the banking and payments system, promote innovations and broaden the range of financial products and services available to bank customers.
The Godwin Emefiele-led CBN disclosed this in a recently released circular titled ‘Operational guidelines for open banking in Nigeria’.
Open banking is a banking practice in which third-party financial service providers are given open access to customer banking, transaction and other financial data from banks and non-bank financial institutions via application programming interfaces, APIs.
According to the CBN “Open banking recognises the ownership and control of data by customers of financial and non-financial services, and their right to grant authorisations to service providers to access innovative financial products and services.
“This is anticipated to drive competition and improve access to banking and payments services.
“Participants in open banking shall adhere strictly to security standards when accessing and storing data, and shall be subject to minimum privacy standards, operational standards, risk management standards and customer experience standards as prescribed by the Bank.”
