The Central Bank of Nigeria (CBN) has issued a stern warning to Nigerian banks and fintech companies to prioritize cybersecurity as the country embraces open banking.
Speaking at the recent Q2 Regulators Forum hosted by FintechNGR, Mr. Musa Jimoh, Director of Payments System Policy at the CBN, highlighted the critical need to protect customer data in this new financial landscape.
Open banking, which allows banks to share customer data with trusted third-party providers through secure APIs, is a game-changer for Nigeria’s financial services sector. However, this innovation also opens doors to potential cyber threats if not properly managed.
“There have been numerous cases of data breaches globally,” Jimoh said. “Open banking should not become an open door for cybercriminals. We must ensure that the security around our APIs, payment infrastructure, and customer data is unbreakable.”
The CBN official emphasized that banks and fintechs must invest heavily in cybersecurity measures to safeguard customer information. He also urged financial service providers to educate their customers on the importance of consent and the risks of cyber fraud, warning against scams that might trick users into sharing sensitive information like PINs.
“Security, privacy, and consumer protection are vital to the success of open banking,” Jimoh noted. “Customers must clearly understand what data they are sharing and how it will be used.”
To streamline this process, the CBN is working on standardizing the application programming interfaces (APIs) used in open banking. This will allow fintechs and banks to interact seamlessly, reducing complexity and enhancing security across the board.
Nigeria became the first African country to establish an open banking framework when the CBN released operational guidelines in March 2023. The framework enables customers to grant permission for their financial data, such as account balances and transaction history, to be shared securely with third-party providers, fostering innovation and personalized financial services.
