Founder and Chief Executive Officer of Sparkle, Uzoma Dozie, says open banking will transform Nigeria’s financial ecosystem by giving customers greater control over their financial data, enabling secure information sharing and improving access to financial services.
Speaking during an interview with ARISE NEWS on Friday, Dozie said open banking is about putting power back into the hands of customers by allowing them to securely share their banking information with trusted third parties.
On the impact of open banking on customers, Dozie said:
“Open banking is actually unlocking, putting power back into the hands of the customers. Today, you’re banking with a particular bank and you’ve been banking with it for 20 years. All that information is locked there.”
He explained that open banking will help address challenges faced by customers by allowing them to securely access and share their financial records across institutions, improving access to personalised financial services.
“Customers who have built long-term banking histories often face difficulties when seeking financial services from other institutions because their transaction records remain within individual banks. Open banking helps unlock this information, giving customers greater control and enabling wider access to financial solutions.”
Dozie said open banking will enable customers to make better use of their financial history, allowing institutions to provide more personalised services and improve access to financial solutions.
“Open banking is reshaping the financial sector by putting customers in control of their financial information and allowing institutions to provide more personalised services and better financial solutions.”
Discussing the role of Application Programming Interfaces (APIs), Dozie described them as the foundation that allows different financial systems to communicate and securely exchange information.
“API is a way of how computers talk to each other. It is a standard that says this is how we’re going to engage.”
He added that APIs act as a bridge between different financial platforms, allowing systems to work together more efficiently.
“APIs are like the waiter in a restaurant. They serve as the link between the customer and the kitchen, allowing different financial systems to communicate and work together more efficiently.”
Dozie said standardisation is critical to the success of open banking because existing systems are often fragmented.
“Open banking is coming up with a standard that helps people move information around in a safe and secure manner so that other people can use it to do things for their clients.”
Addressing concerns around privacy and security, Dozie said trust, standards and data protection will be essential to the success of open banking, stressing that customers must remain in control of their information.
“Trust is at the centre of this. We need standards, we need to ensure that data is protected, and customers must always remain in control of their information. The success of open banking depends on building confidence that people’s data is safe and used responsibly.”
On data privacy, Dozie said customers must provide explicit consent before their personal information, including BVN-linked data, can be accessed or used by third parties.
“Customers will be required to give permission before their data, including information linked to their BVN, can be accessed or used by third parties.”
Speaking on regulation, Dozie praised the Central Bank of Nigeria’s efforts in developing an open banking framework, describing it as an important step towards financial innovation and inclusion.
“Nigeria has been one of the first countries on the continent to put in place the necessary open banking infrastructure. The regulatory framework by the Central Bank of Nigeria is a major step towards enabling greater financial inclusion and innovation across the ecosystem.”
He identified full implementation and rollout as the major gap that must be addressed for open banking to achieve its intended impact.
“The major gap remains the full implementation and rollout of the system, as effective execution will determine its overall success.”
Discussing the impact of open banking on financial institutions, Dozie said banks that fail to adapt could lose opportunities, while those that embrace the system could leverage customer data to create better services.
“Banks that don’t adapt to open banking risk losing opportunities, but those that embrace it can leverage the data they already have to create better services for customers.”
He added that combining open banking with artificial intelligence could significantly improve lending decisions by helping institutions analyse years of customer data and understand customers better.
“Combining open banking with artificial intelligence is going to significantly improve lending decisions because institutions can quickly analyse years of customer data and understand customers better.”
Highlighting the impact of artificial intelligence on open banking, Dozie said AI would enable financial institutions to analyse years of customer data in seconds, improving lending decisions and customer services.
“When you now put AI on top of it, it means I can glean 20 years of data in a fraction of a second.”
Looking ahead, Dozie said adoption and public awareness would be crucial to unlocking the full potential of open banking in Nigeria.
“Adoption and education are going to be key because people need to understand open banking and how it can improve financial services in Nigeria.”
Emphasising the benefits of open banking, Dozie said improved access to reliable financial data would help reduce lending risks, lower costs and expand credit opportunities for Nigerians.
“Increased access to reliable financial data will help reduce lending risks, lower costs and create more opportunities for Nigerians to access credit.”
Concluding, Dozie said the success of open banking in Nigeria would depend on wider adoption, public awareness and building trust around secure data sharing.
“Unlocking access to financial data will help reduce lending costs and expand credit opportunities, but the success of open banking will depend on adoption, awareness and trust in secure data sharing.”
Goodness Anunobi
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