How open banking will change how fintechs manage API integrations with banks

In the early days of building fintechs in Nigeria, accessing bank data was complex and often dependent on personal relationships. 

Most commercial banks didn’t offer developer-facing APIs. There were no public sandboxes, no structured onboarding processes, and no standards for sharing data across institutions. 

If they were trying to build anything that required account information or transaction history. Some companies wrote scripts to automate logins into online banking platforms and scrape user data; a method that worked, but was fragile and raised serious security and compliance concerns. 

Others relied on API aggregators like Mono, Okra, and Stitch, which offered a more polished layer of access to bank data. These platforms helped abstract the complexity, but under the hood, they often used the same unofficial workarounds. 

There was no industry standard for requesting, formatting, securing, or consenting data. Fintechs had to maintain multiple one-off integrations with banks, each with its limitations. 

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It created duplication of effort, a high barrier to entry for new players, and, in many cases, a fragile user experience. That’s about to change.

With the rollout of open banking in Nigeria, there’ll be a shift to a more structured, transparent, and legally backed system. Open Banking Nigeria, working in tandem with the Central Bank of Nigeria, has established a framework that defines how financial data should be shared, including API standards, using security protocols like FAPI (Financial-grade API), and a governance model that mandates user consent and auditability.

For engineering and product leaders at growth-stage fintechs, it changes the entire approach to integrating with banks and accessing customer financial data. It reduces guesswork, unlocks new product possibilities, and makes it easier to scale responsibly.

This article explains what will be different about API integrations when the Nigerian banking and fintech industry adopts open banking and how fintech teams can prepare for what comes next.

How do fintechs in Nigeria currently handle API integration with banks?

The most common approaches fall into three broad buckets:

Screen scraping and credential capture

With this method, a user inputs their internet banking credentials into a third-party app, and a backend script simulates a login, scrapes the data from their dashboard, and returns it to the fintech. This approach is deeply insecure. If the bank changes its frontend, you have to re-engineer the entire data pipeline. 

Direct bank partnerships

Established fintechs or those with strong connections could form direct integrations with specific banks. However, these partnerships were often limited in scope, inconsistent in technical quality, and difficult to scale. Each bank has a different authentication method, data structures, and uptime SLA.

API aggregators

Platforms like Mono, Okra, Stitch, and OnePipe stepped in to bridge the disconnect between fintechs and traditional banks. They provided unified APIs that simplified integrations, saving engineering teams from the pain of building and maintaining separate connections to every bank. But under the hood, especially in the early days, many of these aggregators depended on tactics like screen scraping, reverse-engineering, and creative workarounds. Some eventually secured direct partnerships with banks, but the model operated in a regulatory grey area for a long time. 

What kind of financial data and services can fintechs currently access?

Despite the fragmented infrastructure, fintechs in Nigeria have managed to tap into a wide range of financial data and services.

Here’s what’s typically accessible today:

• Basic account details, such as account name, number, and current balance, are often used for onboarding, fraud prevention, and setting transaction limits.
  
• Transaction history, including timestamps, transaction descriptions, merchant codes, debit/credit flags, and available balance at the time of each transaction. This data helps with credit scoring, financial analysis, and budgeting features.
  
• Identity verification data points such as BVN (Bank Verification Number), NIN (National Identification Number), date of birth, email, and phone number. These are important for KYC (Know Your Customer) and fraud mitigation.
  
• Bank statement generation, usually offered as raw PDFs or structured JSON outputs, which lenders and credit platforms use for affordability checks and risk models.
  
• Payment initiation is typically limited and conditional, but available in some cases via NIP (NIBSS Instant Payment) APIs or through partnerships with PSPs or banks. This capability allows fintechs to enable transfers, debits, and wallet top-ups.

What are the current limitations of fintech API integrations?

Even though fintechs have made impressive strides in Nigeria’s financial ecosystem, there are serious challenges with how they currently access bank data. This affects product reliability, user trust, operational costs, and legal standing. 

Let’s break down the main pain points:

Security concerns

The widespread use of credential capture and screen scraping is an impending disaster. When fintechs ask users to hand over bank login details so their systems can scrape data, they fundamentally break core cybersecurity principles. This practice opens doors to fraud, account takeovers, and data leaks. It also puts fintechs in a precarious legal position, especially with Nigeria’s evolving data protection laws like the NDPR. If anything goes wrong, fintechs bear the full liability, potentially damaging their reputation and inviting regulatory penalties. Beyond that, this approach undermines user trust; it’s hard to regain once lost.

Lack of API standardisation

Each bank speaks its own technical language. This means every integration becomes a bespoke project, where engineering teams spend countless hours decoding varied API responses, mapping different JSON structures, and normalising inconsistent data formats. Without a universal schema or common standard, scaling integrations becomes a nightmare. Add undocumented API changes or versioning issues, and you have an engineering headache that pulls resources away from innovation toward firefighting.

High integration and maintenance costs

Because these connections are fragile and prone to breaking, fintechs must constantly monitor and fix integrations. This means dedicating engineering bandwidth not just to building new features but to patching existing ones. Multiply that by the number of banks and financial institutions you want to cover, and the cost becomes significant, especially for startups and growth-stage fintechs that need to move fast. This heavy maintenance load is unsustainable and consumes budgets fintechs would better allocate to product development and customer acquisition.

Limited and unpredictable access to customer data

Banks control what data fintechs can access, and it’s often a very selective window. You may get partial transaction histories, outdated balances, or no access to certain account types. Real-time updates are a rarity rather than the norm. This limited access makes it difficult for fintechs to build reliable credit scoring models, risk assessments, or financial insights that require a comprehensive and timely view of a customer’s financial life.

Fragmented and inconsistent customer experience

Because fintechs pull data from multiple sources, each with different formats and update schedules, end users often see conflicting information. Imagine an app showing different account balances from different banks or missing key transaction details like merchant names or timestamps. This inconsistency frustrates users, leads to confusion, and damages brand credibility.

Regulatory ambiguity and compliance risks

Without clear, enforceable data sharing and consent standards, fintechs are navigating a grey area. Even if unintentional, there’s a real risk of breaking the Central Bank of Nigeria’s regulations, the NDPR, or other data privacy frameworks. The absence of a formal legal framework means fintechs must operate cautiously, balancing innovation with compliance risk. This uncertainty can stifle new product development and slow down market growth.

How will the adoption of open banking change fintech-bank API integrations? 

Open banking has a straightforward but ambitious goal: to replace the patchwork, fragile, and often risky data access methods with a standardised, secure, and regulated framework that benefits everyone.

Here’s what changes:

Access to richer, standardised data 

Open banking APIs will provide data consistency across banks. This means that whether you pull transaction history from Zenith, GTBank, or Access Bank, the data fields will be uniform, structured, and predictable. This standardisation drastically reduces the complexity of integrations and enables fintech teams to focus more on leveraging data than cleaning it.

Beyond that, open banking will expand the types of accessible data beyond the basics. For example, real-time notifications for direct debits, standing orders, and payment consents will become available. This richer, more granular data opens doors to better product features such as automatic expense categorisation, predictive cash flow forecasting, or smarter credit risk models, that were previously difficult to build due to data limitations.

A regulated consent framework that puts the customer in control

One of the biggest failings of current systems is how consent is handled (if it’s handled at all). Open banking introduces legally binding, standardised consent mechanisms that require explicit customer authorisation before data sharing happens. 

This consent is granular, time-bound, and revocable. Customers will know exactly what data they share, with whom, and for how long. This transparency builds trust and reduces the risk of data misuse.

For fintechs, this framework isn’t just about compliance with Nigeria’s Data Protection Regulation (NDPR) or global standards like GDPR; it’s about building long-term customer relationships based on respect and transparency. The legal certainty that comes with regulated consent also protects fintechs from potential liability related to data breaches or unauthorised access.

Stronger security protocols built for modern fintech needs

Open banking is anchored on advanced security protocols like Financial-grade API (FAPI) standards and OAuth2-based authorisation flows.

Instead of passwords or OTPs, fintechs will use secure tokens that grant limited, revocable access to data. These tokens never expose sensitive credentials, which reduces attack surfaces and enhances user security.

This shift also means that security audits, penetration tests, and compliance checks will become part of the integration lifecycle, raising the overall security bar across the industry.

More reliable, maintainable integrations with service-level guarantees

Banks will no longer be able to treat their APIs as side projects or “experimental” interfaces. Open banking mandates that financial institutions maintain production-grade APIs with documented service-level agreements (SLAs) that cover uptime, latency, and incident response.

This commitment means fintech engineering teams can build more reliable systems without constantly firefighting integration failures. Instead of scrambling to fix broken endpoints or work around undocumented changes, engineers can confidently plan product roadmaps.

Monitoring, logging, and incident escalation processes will also become standardised, allowing fintechs to respond faster and proactively improve user experience.

New product and business model opportunities

The most exciting aspect of open banking is what it unlocks beyond integration headaches. When fintechs have consistent, secure, and timely access to comprehensive financial data, it will spark true innovation.

Credit scoring models become more accurate and inclusive because they incorporate a wider range of real-time financial behaviours. Personal finance management apps can automate savings goals or debt repayments with more confidence. SME lenders will gain detailed visibility into cash flows and payment cycles, enabling tailored lending products.

Furthermore, open banking enables new business models such as Account Information Services (AIS) and Payment Initiation Services (PIS), which could disrupt how payments and financial advice are delivered in Nigeria. In short, open banking sets the stage for a new generation of fintech products, faster to build, more reliable to run, and richer in value for customers.

Conclusion

Fintechs have built impressive solutions despite working with patchwork integrations, inconsistent data formats, and regulatory uncertainty. They’ve proven that innovation can thrive even in challenging conditions. But imagine what’s possible when they adopt open banking and can innovate without the current challenges. 

Open banking won’t just solve today’s integration headaches. It’ll create the foundation for new financial products that are more secure, reliable, and valuable to customers. The standardised APIs, regulated consent frameworks, and production-grade security protocols will level the playing field, making it easier for new players to enter the market and for existing fintechs to scale their offerings.

Open banking offers a clear path forward for engineering and product teams currently wrestling with brittle integrations and data inconsistencies. The question is whether your fintech will be ready to take advantage of the opportunities it creates.

Written by Chigozie Madubuko is a Lead Backend Engineer at Kora, where he helps build secure, scalable financial solutions. He specialises in designing high-performance systems that power seamless financial transactions and integrations. Chigozie has played a key role in shaping Open Banking API standards in Nigeria, working alongside industry leaders to drive financial access across Nigeria.