CBN Asks Banks to Obtain Customer's Permission Before Sharing Personal Data in New Operational Guidelines
- The Central Bank of Nigeria has asked banks and other financial institutions not to share customers' data without their consent
- The bank disclosed this in a new set of operational guidelines released on Wednesday, March 8, 2023
- Per the statement, banks must obtain customers' authorisation before giving out their information to a third party
The Central Bank of Nigeria (CBN) released new operational guidelines for open banking on Wednesday, March 8, 2023.
The new guidelines set principles for data-sharing across the banking and payment ecosystems.
Source: Getty Images
Banks to keep an open banking dossier
In circular PSM/DIR/PUB/001/043, dated March 7, 2023, the apex bank stated that the guidelines would establish greater access to customer-centric data-sharing between banks and third-party companies.
PAY ATTENTION: Subscribe to Digital Talk newsletter to receive must-know business stories and succeed BIG!
Open banking enables secure interoperability in the banking sector, allowing third-party payment services and other financial institutions and service providers to access banking transactions and related data from banks and financial institutions.
The guidelines state that banks keep an open banking registry to grant regulatory supervision on players, regulate operators and improve transparency in the industry.
Banks must seek customer's consent before releasing their data
The guidelines also state that banks seek customers' approval before sharing their data and that their data can be obtained for Open Banking products and services.
Daily Trust reports that the CBN's Director of Payment System Management, Musa Jimoh, said the guidelines further the bank's directive to stabilise the financial system.
He said:
"The adoption of open banking in Nigeria will foster the sharing of customer-permissioned data between banks and third-party firms to enable the building of customer-focused products and services.
"It's also aimed at enhancing efficiency, competition, and access to financial services."
The development comes as bank customers flood the CBN with complaints of data leaks to third parties.
Third parties, such as loan apps and other fintech firms, have exploited the lacuna in the system to divulge customers' information without proper permission from them.
CBN asks FG to use eNaira to transfer N368.8 billion to Nigerians
Legit.ng reported that the Central Bank of Nigeria had pitched the eNaira to the federal government as the best alternative for sharing $800 million, about N368.8 billion, in its National Social Safety Net Programme Scale Up.
The pitch by the CBN is an effort to drive and strengthen its cashless policy.
The pitch was contained in CBN’s National Fintech Strategy document.
Source: Legit.ng
