The Central Bank wants NIBSS to manage the Open Banking registry, but the banking industry says there is another way.
After two years of planning and drafting regulations, Nigeria’s central bank announced rules to guide Open Banking in Africa’s largest economy two weeks ago. Adopting Open Banking in Nigeria “will foster the sharing of customer-permissioned data between banks and third-party firms to enable the building of customer-focused products and services,” reads the central bank statement.
The announcement was hailed by banking industry and fintech professionals in Nigeria and globally. The next step to operationalise the rules for open banking involves creating a registry that will function as a public repository for details of registered participants. The Open Banking Registry will also function as a repository for the APIs that allow banks and non-banks to exchange customer data.
Per the Open Banking Guidelines, the Open Banking Registry’s API interface would serve as “the primary means by which API providers manage the registration of their API consumers.” Last week, the central bank held talks with financial sector players to discuss the next steps for creating this Registry. Multiple sources who were privy to the talks say the Central Bank of Nigeria told representatives of financial sector institutions that it wanted the registry to be designed and maintained by The Nigerian Inter-Bank Settlement System (NIBBS).
Industry professionals who were at the meeting say that while they have no qualms with NIBBS building the registry, it is best for the registry to be run by a separate entity. They argue the settlement corporation—which was co-created by the CBN and the Nigerian Banker’s committee—cannot be both regulator of open banking and a participant in the open banking system.
The CBN’s position is that centralising Open Banking access with NIBBS will be cheaper, but industry players say the cost concern is marginal. If banks could collectively finance the $50 million Bank VerificationNumber project they could be willing to invest in industry-led Open Banking infrastructure.
NIBBS was created in 2014 to enable same-day clearing and settlement of inter-bank transfers and payments in Nigeria. NIBBS also offers other payment products including mCash, a customer-to-merchant payments product, NQR, a QR-code-based payments platform and e-Bills Pay, for collecting levies, and fees. Centralising Open Banking within NIBBS would make it both a regulator and a competitor.
Industry professionals concede that the CBN may have other legitimate reasons for proposing this arrangement, but they ask that the apex regulator be open to suggestions from fintechs and banks. “We’re engaging with the CBN. They have always given us a listening ear,” one person close to ongoing talks told TechCabal.
from TechCabal https://ift.tt/vqYI5pn
via IFTTT
I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
Write your views on this post and share it. ConversionConversion EmoticonEmoticon