When the Central Bank of Nigeria (CBN) launched its Open Banking Guidelines and the Open Banking Registry, it marked a turning point for the country’s financial ecosystem. For the first time, consumer data in banking was no longer a loosely managed asset but a regulated right, to be accessed only under conditions of consent, accountability and security. Layered with the Nigeria Data Protection Act (NDPA) of 2023, the guidelines send a clear message to fintechs: compliance is not negotiable, and innovation must be grounded in trust.
This is not uncharted territory. Europe, the United Kingdom and Australia have already lived through the promises and pitfalls of open banking. Their experiences provide a mirror for Nigeria, revealing not only what works but also what to avoid. The comparison is important because in the race to modernise finance, the line between opportunity and regulatory backlash is thin.
Take consent, the foundation of any data-sharing regime. The CBN requires fintechs to obtain explicit, informed permission for each transfer of consumer data. The NDPA sharpens this further, insisting on transparency, purpose limitation and the right to revoke consent at any time. On paper, this sounds airtight. Yet Europe shows how complicated this can become in practice. Under the EU’s Payment Services Directive 2 (PSD2), banks and fintechs were told they could only access customer accounts with “explicit consent.” But GDPR, Europe’s overarching data protection law, uses its own definition of consent and also allows other legal bases for processing data. Regulators had to step in and clarify that PSD2 consent was essentially a contractual authorisation, while GDPR consent was a data protection safeguard. The lesson for Nigerian fintechs is that “consent” will mean different things under CBN and NDPA, and the safest route is to build dual-layer systems that meet both standards.
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Participation is another area where models diverge. Nigeria’s Open Banking Registry creates a single gatekeeper, centralising supervision. This makes the Nigerian system look more like the UK’s, where Open Banking Limited manages a central directory of participants and technical standards. In contrast, the EU chose a patchwork system in which national regulators license third-party providers, while Australia built its Consumer Data Right (CDR) on a rigorous accreditation model policed by its competition and privacy regulators. Each model reflects a trade-off between speed and scrutiny. For Nigerian fintechs, the implication is clear: registration with the CBN is not just an administrative step. It will demand evidence of technical capacity, security controls and governance long before products can reach consumers.
Click to signupTechnical obligations are perhaps the least negotiable of all. Around the world, open banking has hardened into a baseline of requirements: strong customer authentication, encrypted connections, tokenised sessions and immutable audit logs. The UK and Australia were quick to codify these standards, which gave their ecosystems clarity. Europe’s looser approach under PSD2, by contrast, produced uneven practices and delays. Nigerian fintechs would do well to borrow from the UK and Australian playbooks: OAuth 2.0 for consumer flows, mutual TLS for server authentication, short-lived tokens and comprehensive monitoring. These are not theoretical safeguards. They are what regulators now expect to see, and lapses have already led to penalties elsewhere.
On data protection, Nigeria’s NDPA mirrors the spirit of the GDPR, granting citizens rights of access, correction and erasure, and imposing accountability on controllers and processors. In Australia, the CDR sits alongside the Privacy Act and is enforced by the Office of the Australian Information Commissioner. Across all these regimes, the message is the same: fintechs cannot treat data protection as an afterthought. It must be evidenced in practice, through impact assessments, records of processing, and contracts with every partner that touches consumer data.
The scope is where Nigeria’s framework may still evolve. PSD2 initially focused narrowly on payment data. The UK broadened the mandate, compelling its largest banks to open up richer data sets, including transaction histories and product details. Australia went further still, designing the CDR as a sector-agnostic right, capable of extending into energy and telecommunications. Nigeria’s guidelines point first to payments and banking data, but fintechs should prepare for an eventual widening of scope. Innovation thrives when datasets expand, but regulatory expectations expand alongside them.
Governance and accountability form the policy scaffolding, where Nigeria requires board-level data policies and Data Protection Officers for key players, echoing the NDPA’s call for transparency. This centralised CBN oversight parallels the EU’s distributed enforcement under PSD2 and GDPR, which mandates records and impact assessments to tackle ethical pitfalls like algorithmic bias, and these are nuances the NDPA addresses less explicitly. The UK’s independent body promotes ethical innovation, a model worth considering to diversify Nigeria’s regulatory lens. Australia’s collaborative agency structure prioritises consumer experience, and Brazil’s central bank drives AI ethics in expanded open finance. Enhancing NDPA with GDPR-like ethical depth could position Nigeria as a beacon of responsible tech policy.
Enforcement history provides the sharpest lessons. In Europe, banks that dragged their feet on implementing secure APIs faced regulatory interventions. In Australia, the ACCC and OAIC have already sanctioned participants for providing incomplete or inaccurate data, with HSBC publicly flagged for data quality issues under the CDR. These are not trivial mistakes. They show that regulators abroad punish not only outright breaches but also failures of accuracy, timeliness and transparency. Nigeria’s regulators will almost certainly follow the same path.
Finally, cross-border data flows highlight Nigeria’s protective stance, demanding CBN approvals and NDPA safeguards for international transfers. The EU’s GDPR toolkit (standard clauses and corporate rules) offers more flexibility for global partnerships, as does the UK’s post-Brexit adaptations and Brazil’s GDPR-inspired LGPD. Australia’s domestic focus contrasts, but Nigeria could adopt Europe’s mechanisms to attract foreign investment without compromising sovereignty.
The future of open banking in Nigeria depends on whether fintechs can internalise these lessons. Consent must be more than a box to tick. Registration must be treated like a licensing process, not a formality. Technical security must be demonstrable, not aspirational. Data protection must be woven into every process, not bolted on. In the global experiment of open banking, regulators have already shown what they will and will not tolerate. Nigerian fintechs that ignore these lessons risk running into the same enforcement wall. Those who heed them will not only be compliant but will also gain the trust that is indispensable in building a sustainable financial ecosystem.
As Nigeria charts this course, its Open Banking initiative embodies the continent’s ambition, drawing from PSD2’s blueprint while adapting to local realities. Yet to truly thrive, it must integrate GDPR’s protective rigour, the UK’s user empowerment, Australia’s breadth, and Brazil’s agility. In doing so, Nigeria won’t just lead Africa, it will redefine global standards for inclusive, secure financial innovation, turning policy vision into tangible prosperity.
Osemudiamen “Ose” Umane is a corporate lawyer with expertise in regulatory compliance and contract management, advising across energy, technology, and corporate sectors, and writing on how legal frameworks adapt to support innovation.
