Data privacy in open banking isn’t the headline-grabbing attention in Nigeria. It’s not the celebrity scandal everyone talks about, and it’s certainly not what you’ll see trending on Twitter on a random Tuesday.
But maybe it should be. Because right now, while we’re all focused on the newest loan app or the hottest fintech, our data is flying around—shared between banks, fintechs, and everyone in between. And most of us don’t even know who’s holding it, what they’re doing with it, or why it even matters.
The thing is, open banking is great. It’s the future of finance—where anyone can access better services and competition means we all get a fairer deal. But the future comes with a price, and in this case, it’s your personal data. Who gets access to it, how it’s used, and how it’s kept safe are questions we should be asking—loudly.
Because if we’re not careful, the same data that’s supposed to give us financial freedom could be the very thing that locks us into new kinds of problems.
So let’s talk about what every Nigerian needs to know about data privacy in open banking—before the hype gets ahead of us, and we end up paying for it in ways we never expected.
1. Your data is valuable—understand what you’re giving up
Your financial data is more than just numbers on a bank statement—it’s a story about who you are. It tells companies where you spend your money, how often you make payments, and your habits.
In open banking, this data becomes a goldmine for financial institutions and fintechs. They use it to offer targeted loans, better banking services, or even investment opportunities tailored to your behavior.
But with value comes responsibility. If you’re not careful, you could end up sharing sensitive information that could be misused or exposed. For instance, an app that claims to help you budget could also use your spending habits to build a consumer profile and sell it to marketing companies.
Understanding what you’re giving up means understanding that your data is a currency—something valuable that needs protection, not just something you casually hand over without thinking twice.
2. Consent Is key—you should always be in control
Consent sounds simple, but in practice, it’s where things can get murky. In open banking, giving consent means more than ticking a box—it means giving specific permission for a specific purpose. You should be able to say, “Yes, I’m okay with you accessing my transaction history for this service,” and understand exactly what that entails.
NIBSS manages this through the Open Banking Consent Management System (OBCMS), ensuring your consent is recorded and tracked. This means you have the power to know who accessed your data, when, and why.
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Unfortunately, in a hurry to use new apps or services, people often click “agree” without reading what they’re agreeing to. This is risky. You should know exactly how your data will be used, who will have access, and for how long. If you’re not comfortable with these terms, you can refuse. Consent should always be informed—it’s your data, and you have the right to control it. Open banking was designed to put consumers in charge, but it only works if you understand and exercise that control.
3. The players—who has access to your data?
Open banking opens up a new level of competition among banks and fintechs, which is great for innovation. But with more players in the game, it’s important to know exactly who has access to your data.
It’s not just your bank anymore—third-party providers, including fintech apps, can request access to your financial information. This could be for budgeting tools, alternative lending platforms, or even savings apps.
NIBSS manages the Open Banking Registry (OBR), which lists all the licensed players in the ecosystem. This registry ensures that only verified entities can participate. Before you share your data, check if the fintech you’re dealing with is registered with the OBR.
If they’re not on the list, then you should have serious doubts about their legitimacy. The Nigerian financial ecosystem is still evolving, and not everyone who claims to offer a financial service is trustworthy. Knowing who has access to your data—and ensuring they’re authorized—is an important part of protecting your privacy.
4. Data security—not everyone is playing nice
In a country where data fraud is a major concern, security is everything. When it comes to open banking, your data doesn’t just sit in one place—it moves between your bank and multiple third-party providers, which means there are multiple points where things can go wrong.
NIBSS enforces strict security protocols to ensure that data is encrypted, transmitted safely, and only accessed by those with the right permissions. APIs used in open banking must meet high standards of security, including strong encryption and secure authentication protocols like OAuth 2.0.
But, no system is foolproof. Data breaches happen. If your data ends up in the wrong hands, the consequences can be severe—unauthorized transactions, identity theft, or even fraud attempts. This is why it’s important to use apps and services you trust, and why you should be mindful of the kind of data you share.
Even with the best security in place, being informed about how your data is handled and staying alert to any suspicious activity are your best lines of defense.
5. Regulatory protections are there—but they’re not perfect
The Central Bank of Nigeria (CBN) has implemented regulations to protect consumer data in open banking, including rules around privacy, data security, and transparency.
These regulations are there to ensure that your data is handled with care, that you know exactly who has access, and that your consent is properly managed. But here’s the thing—regulations are only as good as their enforcement.
In practice, the oversight is shared between CBN and NIBSS, with NIBSS ensuring that participants follow technical standards and CBN handling licensing and penalties for breaches. But, as we’ve seen in the past, enforcement in Nigeria can sometimes be inconsistent.
Here is a breakdown of the important regulations in open banking.
It’s important for you, as a consumer, to know your rights under these regulations. If something doesn’t seem right—if your data is being misused, or if a company is not respecting your consent—you have the right to raise concerns and report violations. Relying solely on regulations is risky—you also need to be proactive about your data privacy.
6. You can revoke access anytime
One of the benefits of open banking is that you’re not locked into anything forever. If you’ve granted a fintech access to your data but start feeling uncomfortable about it, you can revoke that access. This is built into the system—through the OBCMS, you can decide at any point to take back your consent.
Why is this important? Imagine you start using a financial planning app, and at first, it seems great. But then you realize that they’re sending you way too many targeted ads, or you hear about a data breach involving the company.
You have the power to say, “No more.” It’s your data, and you have the right to control who has access, when, and for what reason. NIBSS makes it possible for you to revoke access instantly, ensuring that your financial information stays in your control.
7. Transparency—ask questions
Transparency is your right, but it’s something many people don’t ask for. When you use a service that requests your financial data, you should be comfortable asking questions: Why do you need this data? How will you use it? How long will you keep it?
The companies that are part of the open banking ecosystem are required to be transparent about their practices. If they can’t answer these questions clearly, that’s a warning sign.
In Nigeria, where the financial landscape is changing rapidly, there are many new players trying to get your attention. Some are legitimate; others may not be. Transparency is one way to tell the difference. A trustworthy company will have no problem explaining their data use policy, how they secure your information, and what your rights are.
If an app is vague, evasive, or tries to rush you through the consent process, think twice. Being proactive about your data privacy means demanding transparency and making informed decisions about who you trust with your financial information.
Here are answers to frequently asked questions about open banking in Nigeria.
With power comes responsibility
Open banking is designed to give you more control, more options, and ultimately, better financial services. But with this power comes the need to stay informed and vigilant about how your data is used.
You have the right to know who has access to your information, the right to control when and why it’s shared, and the power to revoke that access at any time. Understanding these rights and exercising them is key to protecting your financial well-being. In an ecosystem that’s growing fast, with new players joining every day, your data is valuable—and it’s up to you to treat it that way.
