Revolutionising Nigerian banking: Rise of BaaS and role of information governance
Michael Irene is a data and information governance practitioner based in London, United Kingdom. He is also a Fellow of Higher Education Academy, UK, and can be reached via moshoke@yahoo.com; twitter: @moshoke
Banking as a Service (BaaS) is a financial service model that provides third-party companies with access to banking infrastructure, licences, and services via APIs. BaaS has revolutionised the banking industry and transformed the way banks deliver their services.
In Nigeria, BaaS is an emerging trend, with many banks providing APIs to fintech companies to offer innovative financial solutions. Information governance is also an important aspect of BaaS, as it ensures that sensitive data is handled securely and in compliance with regulations. This article explores the state of BaaS in Nigeria and the role of information governance in it.
The banking industry in Nigeria is one of the most dynamic and rapidly evolving in Africa. With a population of over 200 million people and a growing middle class, Nigeria has become an attractive market for both local and international banks. In recent years, BaaS has gained momentum in Nigeria, with many banks offering APIs to fintech companies to provide innovative financial solutions to their customers. This has led to the emergence of several fintech start-ups that leverage BaaS to deliver services such as mobile banking, remittances, and payments.
The Central Bank of Nigeria (CBN) has been supportive of BaaS, recognising its potential to increase financial inclusion and promote economic growth. In 2018, the CBN issued guidelines for licensing BaaS providers, outlining the requirements for obtaining a licence and the scope of permissible activities. These guidelines have helped to create a regulatory framework for BaaS in Nigeria, ensuring that the services provided are safe and secure for customers.
Information governance is critical to the success of BaaS in Nigeria. With the increasing use of APIs to provide financial services, the amount of data generated and transmitted is significant. This data includes personal and financial information that must be handled with care and in compliance with regulations.
Information governance involves the management of data throughout its lifecycle, from creation to disposal. It ensures that data is accurate, complete, secure, and compliant with legal and regulatory requirements. In the context of BaaS, information governance is essential to maintain customer trust and confidence in the services provided.
Fintech companies must ensure that their systems are secure, and that customer data is protected from unauthorised access. The CBN has recognized the importance of information governance in BaaS and has included provisions in the guidelines for licensing BaaS providers. These provisions require BaaS providers to implement adequate measures to protect customer data and comply with relevant regulations.
BaaS is an emerging trend in the banking industry in Nigeria, providing fintech companies with access to banking infrastructure, licences, and services via APIs. However, information governance is critical to the success of BaaS in Nigeria. Fintech companies must implement adequate measures to protect customer data and comply with relevant regulations to maintain customer trust and confidence in the services provided. As the BaaS market continues to grow in Nigeria, information governance will play an increasingly important role in ensuring that the services provided are safe and secure for customers.
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