60m unbanked: Expert advocate open banking

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By Cynthia Alo

New indications have emerged that open banking would create a new stream of revenue for banks and also drive the 60 million unbanked population into the formal banking system.

These were the submissions of the financial experts under the Committee of e-Banking Industry Heads (CeBIH) during a webinar tagged: ‘‘Advancing Open Banking in Nigeria’’.

Speaking at the webinar, Trustee, Open Technology Foundation in Nigeria, Mr. Adedeji Olowe, said that ‘‘open banking would foster financial inclusion, adding that it would provide the much needed foundations-regulatory framework, database, strategic partnerships among others, “for third parties like fintech to build affordable solutions, easily integrating with other ecosystem players such as the Telcos and banks.”

On his part, Chief Executive Officer, Sterling Bank, Mr. Abubakar Suleiman, said that before banks embrace the initiative, they must begin to solve other huge economic problems that are outside of banking.

Also speaking, Chief Digital Officer at Polaris Bank, Mr. Dele Adeyinka, said that developed countries are succeeding with the initiative, urging that Nigeria should use it to achieve financial inclusion as one of the challenges affecting the financial industry.

Explaining the driving force behind the initiative, Director Payments System Management at the Central Bank of Nigeria, CBN, Mr. Musa Jimoh, stated that the regulator recognized the growing relationship with banks and communication firms, which was why the regulatory framework for open banking was made.

Jimoh who was represented by Aisha Lantiwo, said that the regulator has seen this to have low-risk profile and moderate risk rating and as such encourages everyone to buy into the idea.

However, Nigeria Inter-Bank Settlement System (NIBSS) said that until the financial institutions are able to solve customer problems like financial inclusion, they may not be able to explore open banking. According to the Managing Director of NIBBS, Mr. Premier Oiwoh, open banking has to do with sharing your clients details with other stakeholders like Fintechs.

Oiwoh who was represented by Mr. Niyi Ajao, said, “About 60 million out of 100million Nigerians do not have access to financial inclusion. We have close to 47million BVN holders but just about a third of these are actively doing banking transactions. Thus there is still a large percentage of the under banked.

“Open banking should reduce the number of the under banked, we need to encourage it.”

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