Investigating the Implications of Open Banking on Consumer Data Privacy and Financial Services Competition in Nigeria
Abstract
This paper examines the effects of open banking on consumer data protection and the competitiveness of financial services in Nigeria through innovation, regulation, and market competition. The free sharing of customers' financial data with third parties through open banking has the potential to transform Nigeria's financial services industry by providing opportunities for both traditional banks and fintech companies. While it offers numerous advantages, it also poses significant threats to consumer data privacy, including risks from misplaced or stolen devices, hacking, and other cyber threats, as well as reduced consumer confidence. Considering risk mitigation as part of innovation, this paper reviews the literature on data protection risks and analyzes Nigeria's NDPR alongside the Regulatory Framework for Open Banking. It also examines how open banking can enhance customer access to services and advance more effective financial solutions. The study identifies several key issues, including technical hurdles, limitations in legal frameworks, and perceived risks from users. It offers corresponding guidelines for action for state authorities, financial organizations, and multinational fintech potential players based on qualitative and quantitative analysis. These include increasing the enforcement of data privacy laws, raising consumer awareness, improving coordination between regulatory authorities, and encouraging the private sector to share data within secure frameworks. The conclusion of this study suggests that open banking holds promising potential to transform the banking industry in Nigeria, provided that its implementation addresses both innovation and privacy concerns.
Keywords
Banking in Nigeria, Competition, Consumer Data Privacy, Financial services, Open Banking
Citations
IRE Journals:
Jeremiah Terdoo Iornenge
"Investigating the Implications of Open Banking on Consumer Data Privacy and Financial Services Competition in Nigeria" Iconic Research And Engineering Journals Volume 8 Issue 3 2024 Page 229-242
IEEE:
Jeremiah Terdoo Iornenge
"Investigating the Implications of Open Banking on Consumer Data Privacy and Financial Services Competition in Nigeria" Iconic Research And Engineering Journals, 8(3)
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