ABA Editorial Board · Aug 26, 2026 · 8 min read
Nigeria became the first African country to go live with formal open banking on 1 August 2025. The Central Bank of Nigeria, the Open Banking Initiative, and most of the Nigerian fintech press have framed this as a transformative moment. We are not convinced. Our view is that the framework will produce meaningful but limited gains over the next 24 months, and that the transformative outcome the advocates promised will not arrive on schedule. Here is why.
On 1 August 2025, Nigeria became the first African country to implement a formal open banking framework. The Central Bank of Nigeria, the Open Banking Initiative, and most of the Nigerian fintech press have framed this as a transformative moment, the end of a decade of regulatory wrangling and the beginning of a new era of API-driven financial innovation. The optimism is understandable. It is also, in our view, premature. We argue here that Nigeria's open banking framework will produce meaningful but limited gains over the next 24 months, and that the transformative outcome its advocates have promised will not arrive on schedule.
Senior practitioners who have built payment infrastructure at scale in Nigeria will tell you, privately and frequently, that the gap between a regulation being in force and the underlying banks actually complying with it is usually measured in years, not months. The August 2025 framework requires CBN-licensed banks to expose standardized APIs for customer-authorized data sharing and payment initiation. Requiring it and achieving it are different things.
Sterling Bank, Sparkle, Wema, and FCMB were ready for the go-live because they had been investing in the Open Banking Nigeria initiative since 2020. Most other Nigerian banks were not. Several large commercial banks still run core banking systems that make exposing modern APIs genuinely difficult, and the commercial incentive for those banks to move fast is weak. A bank that delays its API rollout by six months gets six more months of control over customer data and six more months of being the only channel through which customers interact with their accounts. Until the CBN starts enforcing compliance with penalties severe enough to outweigh that benefit, the banks most likely to drag their feet are exactly the ones whose participation would matter most.
The developers building on top of the framework know this. Several senior engineers at Lagos-based fintech infrastructure companies have made the same observation to anyone who will listen: integrating with the open banking framework as of late 2025 still required bank-specific workarounds in most cases, because the standardized APIs in practice were less standardized than the specification implied.
Open banking as a concept originated in Europe, specifically in the UK's response to concentrated retail banking and the EU's PSD2 directive. The commercial thesis there was that forcing incumbent banks to share customer data would let challenger fintechs compete on product quality rather than on data access, and that this competition would benefit consumers. That thesis broadly worked, though more slowly than its advocates predicted.
The thesis applies imperfectly to Nigeria. Nigerian retail banking is not concentrated in the same way UK retail banking is. Nigerian consumers already have access to multiple banking relationships, multiple mobile money operators, and multiple fintech consumer brands. The problem Nigerian fintech customers face is not that they cannot access their data. It is that their incomes are volatile, the naira is unstable, and credit is expensive. Open banking does not directly address any of those problems.
Founders who have tried to build PSD2-style fintech products for the Nigerian market tend to reach the same conclusion: the friction that open banking removes in Europe is not the friction that matters most in Nigeria. Being able to aggregate a customer's Access Bank and GTBank balances into a single view is a convenience. Being able to extend affordable credit to that customer against their future mobile money income is transformative. The framework enables the former directly. It enables the latter only in the sense that better data underwrites better credit, which is true in theory but takes years to translate into commercial product.
When Okra quietly shut down in May 2025 after burning through USD 16 million, the ecosystem produced a round of thoughtful post-mortems. Most of those post-mortems blamed the wrong things. Regulatory delay was real. Currency depreciation was real. Competitive pressure from Mono and Stitch was real. But the underlying issue was simpler: building a pure open banking infrastructure company in Nigeria, as a venture-backed business trying to scale ahead of the market, was an economic mismatch. The market was not ready, and waiting for the market cost more than the available capital could cover.
Practitioners in the Nigerian payments sector have been saying for years that the companies most likely to succeed in open banking are not infrastructure-only plays. They are companies that package open banking as a feature inside a broader product that already has revenue. Mono's partnership with Mastercard, Stitch's multiproduct acquisition and payments platform, and the continued importance of traditional card rails all point in the same direction. Open banking is a feature, not a standalone business, in most emerging market contexts. The framework going live does not change this.
Our view is as follows. Over the next 24 months, the Nigerian open banking framework will produce real but limited benefits. Customer onboarding in some fintech products will get faster because account verification can happen through the API rather than through bilateral integrations. Credit underwriting will improve marginally because cash flow data is more accessible. A small number of new fintech products will launch that would have been impossible without the framework, mostly in personal financial management and lightweight credit scoring.
What we do not expect is the transformative restructuring of the Nigerian banking sector that the framework's most enthusiastic advocates have promised. Banks will not lose their primary customer relationships in large numbers. Deposit flight from traditional banks to fintechs will continue at the same pace it was already running, driven by product quality rather than by the framework itself. The framework's real value will be as infrastructure that enables the next generation of fintech products, not as a direct catalyst of disruption.
This is not a failure. A well-functioning financial infrastructure framework that enables steady innovation over a decade is a good outcome. It is just a much more modest outcome than the advocates have been promising. The honest posture for anyone building, investing, or regulating in this space is to plan for the modest outcome and be pleasantly surprised if the transformative one actually arrives. Planning for the transformative outcome and being disappointed when it does not is how ecosystems lose confidence in good ideas.
Nigeria has done something important by getting the framework across the line. The rest of the continent should take note, learn from the implementation challenges, and calibrate their own open banking expectations accordingly. This is a useful tool. It is not a revolution.