Open banking is transforming the global financial landscape by enabling third-party developers to build applications and services that access consumers’ financial data, with their consent. By breaking down traditional banking silos, open banking fosters innovation, efficiency, and inclusivity, offering a more seamless experience for users. This model is rapidly gaining traction across many nations, and Nigeria is poised to join this movement in a significant way, especially with the Central Bank of Nigeria’s (CBN) recent announcement.

At the Bankers’ Committee Annual Dinner in November 2024, CBN Governor Olayemi Cardoso announced plans to prioritize open banking in 2025, aiming to create a dynamic financial ecosystem through secure, standardized data-sharing APIs. This initiative is expected to drive fintech innovation, improve customer experience, and enhance financial inclusion, especially for underserved communities, by offering better financial products and services.

Thought leader and fintech expert Adedeji Olowe shared his annual predictions for the digital payments sector, and one point, in particular, stood out — Nigerian startups leveraging global opportunities. Olowe’s forecast for 2025 highlights several key developments, including the increasing regulation of virtual accounts, the growth of agent networks beyond payments, and the potential for Nigerian fintechs to expand beyond Africa. However, his sixth prediction is that Open Banking will go live in Nigeria.

Open Banking Players to Watch in 2025

The open banking sector is gaining momentum, and several Nigerian startups are emerging as key players, ready to make a significant impact. Among these are companies like Mono, Lendsqr, Okra, and MoniMoore which are innovating in the open banking space and are expected to lead the way in 2025.

Mono has established itself as a key player in the Nigerian fintech ecosystem by offering a suite of tools for businesses to access and integrate financial data securely. Their platform allows businesses to connect with over 200 financial institutions across Nigeria, enabling seamless access to bank data, payments, and more. As open banking continues to grow, Mono’s infrastructure will become increasingly essential for businesses looking to leverage financial data for better decision-making and enhanced customer experiences.

Lendsqr enables users to scale their lending operations while minimizing risks and costs. It often integrates with open banking APIs and credit bureaus to assess borrowers’ creditworthiness, making it a key player in Nigeria’s growing digital lending ecosystem. With their platform Kolo.finance is another promising player in the open banking ecosystem, with its focus on making savings and investment more accessible for the average Nigerian. Kolo’s platform integrates open banking principles, allowing users to automate their savings, track financial goals, and invest smarter. By providing individuals with more control over their financial data and decisions, Kolo is positioning itself as a key player in the financial inclusion space.

Okra takes a slightly different approach by focusing on providing financial institutions and businesses with tools to access and leverage financial data in a secure and compliant way. With Okra’s open banking APIs, businesses can access consumers’ bank transaction data, which can be used for everything from credit scoring to improving service delivery. As open banking regulations come into play in Nigeria, Okra is poised to be at the forefront of this transformation.

MoniMoore is another exciting addition to the open banking landscape in Nigeria. This startup is building an AI-powered personal financial management application designed to help users, particularly Nigerians, track, manage, grow, and learn about their finances. It leverages open banking technology to integrate and centralize financial data from multiple bank accounts, providing a seamless way for users to gain a comprehensive view of their financial health. MoniMoore aims to empower users with personalized insights, educational resources, and tools to achieve better financial outcomes.

Challenges and Risks in Nigeria’s Open Banking Journey

While the prospects for open banking in Nigeria are promising, stakeholders must address notable challenges and risks to ensure a successful rollout in 2025. Some of these include:

1. Data Security and Privacy Concerns:
   With increased data sharing between banks and third-party providers, ensuring the security and privacy of consumer data is paramount. Cybersecurity risks, such as data breaches and identity theft, could undermine consumer trust in open banking systems. Stakeholders must prioritise implementing robust security measures and adhering to global best practices in data protection.
2. Regulatory Hurdles:
   Although the CBN has expressed its commitment to open banking, there may still be delays in the finalization and implementation of regulations. Clear guidelines on API standards, licensing requirements, and dispute-resolution mechanisms will be crucial for fostering industry-wide compliance.
3. Financial Literacy and Awareness:
   For open banking to succeed, consumers must understand its benefits and trust the system. Many Nigerians, particularly in rural areas, may lack the financial literacy needed to engage with open banking services confidently. Awareness campaigns and educational initiatives will be critical to driving adoption.
4. Infrastructure Limitations:
   The effectiveness of open banking relies on reliable digital infrastructure. However, Nigeria still faces challenges with internet penetration, inconsistent power supply, and connectivity issues, particularly in underserved regions. Investments in infrastructure will be essential to ensure equitable access to open banking services.
5. Interoperability Issues:
   Ensuring seamless integration between various banks, fintech platforms, and third-party providers may present technical challenges. Without a standardized approach to API development and data sharing, interoperability issues could hinder the smooth operation of open banking systems.

In summary, 2025 is shaping up to be a pivotal year for Nigeria’s open banking and fintech landscape. The CBN’s plans to implement the open banking framework will likely prompt more fintech startups to enter the space, leveraging consumer financial data to provide innovative solutions.