KPMG has urged banks and financial institutions in Nigeria to accelerate their readiness for the rollout of open banking, expected to begin in August 2025.
The advisory was part of KPMG’s latest report released on Thursday, titled “Modernising Core Banking Systems: Navigating Challenges to Achieve Resilient Transformation.”
The report is a thought leadership outcome of the recently held 2025 KPMG Core Banking Modernisation Summit.
Earlier this year, reports confirmed that the Central Bank of Nigeria had approved the implementation of open banking, following the regulatory framework it first introduced in February 2021.
Open banking enables customers to authorise their banks or financial service providers to securely share their financial data with other institutions, such as banks and third-party providers, to foster more personalised and innovative financial products.
This system relies on Application Programming Interfaces, which allow participating institutions to access and exchange data—including product offerings, transaction histories, income details, and credit scores—across the financial ecosystem.
The thought leadership piece from KPMG partly read, “Open banking is currently serving as a powerful catalyst for the growth and innovation of Nigeria’s digital-first financial players by streamlining access to financial data and infrastructure through secure APIs.
“Open banking is an offshoot of the collaboration between traditional banks, neobanks, and fintechs, which seeded the growth of innovative financial products such as virtual accounts (offering digitally generated account numbers for seamless collections and automated reconciliations), card management solutions (including virtual and physical card issuance, tokenisation, and spend controls), payment rail integrations (connecting neobanks and fintechs to global and local payment networks for faster, cross-border transactions), and merchant payment gateways (facilitating secure, multi-channel payment acceptance for business).
“Open banking is paving the way for financial services innovation through ecosystem collaboration and partnerships. With the recent announcement of CBN’s push for the launch of open banking in Nigeria by August 2025, it is imperative for banks to ensure the readiness of their core technologies and operational processes to support open banking.”
KPMG highlighted that open banking will significantly enhance data mobility and customer control by enabling secure data sharing with third-party providers, thereby supporting access to more personalised financial services. The firm explained that API-driven service integration will foster seamless collaboration between banks and third-party providers (TPPs), paving the way for the development of innovative and customer-centric financial products.
Additionally, KPMG noted that open banking can serve as a catalyst for financial inclusion by leveraging alternative data sources—such as mobile phone usage, utility bill payments, and social media activity—to assess creditworthiness and expand access through digital platforms. The firm also emphasised that open banking will play a critical role in driving the modernisation of core banking systems.
“Nigeria’s core banking systems are being reformed faster due to the need to accommodate API-driven data sharing and service integration,” the report affirmed.
KPMG observed that the financial services landscape across West Africa is undergoing a shift, “As digital banking becomes the default and customer expectations accelerate toward real-time, personalised experiences, traditional institutions must confront a stark reality: legacy systems can no longer support the agility, innovation, and resilience that the future demands.
“Meanwhile, emerging digital challengers, free from the technical debt of outdated infrastructure, are redefining what modern banking looks like with intuitive platforms, frictionless service delivery, and rapid product evolution. For incumbent banks, the question is no longer whether to modernise their core platforms, but how to do so effectively.”
