The Central Bank of Nigeria (CBN) is worried about the non-utilisation of data at Banks, saying they are not being utilised adequately by the financial institutions. As such, the Apex Bank has called on Financial Technology startups (FinTechs) to explore and use open data.
These were part of the communiqué issued at the recently held Ennovators Breakfast Series with the theme: ‘Open Banking—Are You Ready’ organised by Emaginations, a brand and marketing company in Lagos. In the Communique signed by Event Director, Sola Fanowopo, experts, which included CBN Deputy Director, Banking and Payment System, Jimoh Itopa, who spoke on “how regulations will impact consumers’ behaviour in open banking era”, noted that data drives automation.
According to them, a Bank that will drive the economy is the Bank with quality data, which it uses creatively. In the utilisation of data, the experts, stressed that a Bank can use it to determine customers’ behaviour in order to understand what kind of service to offer to them.
“That the Banks should be able to indemnify the customers based on available data, which allows the Banks to understand the behaviour of the customers. For them, Banks need to come up with a standard for open APIs, adding: “we do not understand it. We cannot define the standard.”
It was revealed that the CBN is working behind the scene to create Payment Service Directive [PSD3]. According to them, one of the deterrents to financial inclusion is high cost of service, but that the Apex Bank is looking at how to raise the standard for all Banks and fintechs to plug in. While they stressed that data privacy and confidentiality has also become very important, it was revealed that before the year ends, the Apex Bank will see how to engender open banking initiative.
Meanwhile, at the investiture of the Chartered Institute of Bankers of Nigeria (CIBN) 20th President and chairman of council in Lagos, the CBN Governor, Godwin Emefiele, admitted that Fintechs have become a real threat to the Banks. Represented by the Deputy Governor, Economic Policy Directorate, CBN, Dr. Okwu Nnana, Emefiele said: “In our industry, we have a common threat. The enterprise management risk, particularly the threat posed by Fintech, is real.”
He advised bankers to be at alert and also be at the forefront of sensitisation of the banking industry on the real threat posed by Fintech in the industry.