Firstbank hosted its fintech 5.0 summit with the theme “Open banking and its derivative opportunities for the financial ecosystem”.
The summit had discussions by experts, policy influencers, regulatory officials as well as key and leading players in the Nigerian financial, banking, and technology climate.
The need for Open Banking in Nigeria cannot be overemphasized as the importance goes beyond just convenience to its game-changing impact in transforming value creation, product conceptualization, and closing the financially excluded gap.
The event had an opening address from the managing director and CEO of the First bank, Dr, Adesola Kazeem Adeduntan. He noted that the summit is organized by FirstBank to create a global platform for conversations around the future of innovation in the financial services sector specifically in the financial technology space with the objective to contribute to the rapid evolution in banking and financial services sector.
“For us, Open Banking demonstrates the practical fusion of these variables presenting potentials that can redefine product development, customer experience and overall value creation within the financial services system.
“We will also continue to demonstrate our support for startups and innovators in the fintech space by providing them with relevant data, support, and infrastructure to enable them to scale appropriately, through our SMEConnect platform,” he said.
Prof Ndubuisi Ekekwe, the Lead Faculty of Tekedia Institute with a Ph.D. in engineering from John Hopkins University, USA, led the discussion as the Keynote speaker. He spoke on the “Open Banking: The Grand Unification of Application Utility Age”. He noted that Open banking is a platform where banks are required to share their market data through APIs, which are third-party companies to help drive innovation. The quest to getting better in any industry is to build better data systems to be able to understand the numbers around that industry
He said: “As we moved from voice telephony to the mobile internet age, we upgraded that “intra-bank” to “inter-bank”, through NIBBS, offering a unified quasi-banking ordinance.” With open banking, this evolution goes beyond banks to now including insurance, mortgage, etc to drive the new age of application utility era which I expect to be massive.”
He also added that the banking sector has innovated over the decade and has remained the most innovative sector in the country. Open banking offers us a very important tool, it makes it possible for you to share customer data as a bank with trusted third parties through APIs without any form of violation of privacy or risks.
“It gives retail customers the opportunity that their data can be aggregated and with analytic system you can have a better insight of what is happening within your banking experience.
Ankit Sharma, Director at Strategy, a part of the PwC network, based out of Mexico spoke on “Global Perspectives to Open Banking”. He stated that open banking has a collaboration model that allows firms to share data and services through API’s and this collaboration is not only through financial services firms but also with non-financial service firms. He also highlighted different uses cases for open banking in other countries
Mr. Sharma added that for Nigerian banks to successfully engage the open banking operations, they must identify their areas of strength and ensure product and customer relationships top their agenda. He added that financial institutions can start preparing for open banking even without knowing the exact nature and timing of the compliance
Sharma noted that Banks must work on technology, strengthen and government regulatory mechanisms and also sensitize customers on the benefits of open banking. He said open banking has the potential to resolve credit issues in Nigeria.
Speaking on open banking regulation
Deputy Director, Payment System of the CBN, Mr. Musa Jimoh, represented by Mr. Olubukola Akinwunmi, said the open banking framework by CBN looks specifically around the risk management environment that they need to be build to ensure that when they go through full blast open banking regime, they can take care of the concerns of customers.
The current framework has already indicated that the bank will be engaging the industry stakeholders to come up with defined guidelines on how a number of the positions of the framework will be translated into operations. One of them is the open banking registry which will bring transparency to the entire regime.
Aminu Maida, Executive Director, Technology & Operations at Nigeria Inter-Bank Settlement System Plc (NIBSS) added that open banking is a game of skill as its operation relies mostly on experts and expertise. Nibbs will play a critical role in terms of security and consent management. “We are going to see a lot of repurposing and making additional use of what we already have
It is necessary to provide Fintech infrastructure that would be suitable for everyone in the industry as they need to place all financial services providers within the value chain.