CBN moves to standardize APIs, strengthen security in Nigeria’s open banking landscape

The Central Bank of Nigeria (CBN) has intensified efforts to standardize Application Programming Interfaces (APIs) across the country’s financial services sector, as part of its broader agenda to deepen the open banking ecosystem and unlock new innovations in financial technology.

The initiative was disclosed by Mr. Musa Jimoh, Director of Payments System Policy at the CBN, during the second-quarter Regulators Forum organized by the Financial Services Innovators (FintechNGR) in Lagos.

The event, themed “Beyond Compliance: Unlocking Innovation with Nigeria’s Open Banking Framework,” brought together key regulators, fintech operators, banks, and technology stakeholders.

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Jimoh revealed that the apex bank is currently developing a unified API standard that would enable seamless, secure, and consistent integration between banks and licensed third-party providers. “We are developing a unified standard so that if a fintech calls for an account balance in one bank, it works the same way across all banks,” he explained. “This eliminates integration headaches and makes the system more efficient.”

The unified API structure, he said, is designed to reduce technical complexity for developers, improve interoperability across platforms, and enhance data security and regulatory compliance within Nigeria’s financial ecosystem.

Jimoh emphasized that while open banking offers tremendous opportunities for innovation and financial inclusion, it also introduces new risks, especially around data privacy and cybersecurity. “Open banking involves the exchange of sensitive customer data with third-party providers, and this must be done under airtight security,” he cautioned.

“We’ve seen globally how data breaches can cause catastrophic financial and reputational losses. Open banking must not become an open door for cybercriminals.”

He also urged financial institutions to prioritize investments in cybersecurity infrastructure, noting that the integrity of the system depends on how well customer data is protected and how transparently consent is obtained.

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“The very essence of open banking is about trusted third parties accessing customer data with consent. Institutions must ensure that consent is informed, clear, and secure,” Jimoh added. He warned of the potential for social engineering attacks, where fraudsters trick customers into disclosing sensitive information under the guise of enrolling them into open banking services.

“We don’t want a situation where criminals send fraudulent messages saying, ‘Send your PIN to join open banking,’” he warned. “That’s why customer education and widespread sensitization are crucial. Every stakeholder in the financial value chain has a role to play.”

He reiterated that security, privacy, and consumer protection are the three core pillars on which Nigeria’s open banking system must rest. Financial service providers, he said, must implement user-friendly consent mechanisms and ensure customers are never misled about what they are agreeing to share.

Nigeria made history on March 7, 2023, by becoming the first African country to launch a formal open banking regulatory framework.

The CBN’s Open Banking Operational Guidelines define how banks and licensed third parties can securely access and manage customer-permissioned data through standardized APIs.

The move toward API standardization is expected to significantly boost innovation in digital financial services, deepen financial inclusion, and reinforce Nigeria’s position as a fintech leader on the African continent.