Africa Is About To Experience An Open Banking Revolution

What is Open Banking?

Open banking is a financial technology term that refers to: The use of open APIs that enable third-party developers to build applications and products in collaboration with traditional financial institutions. This creates greater financial opportunity for account holders and the financial institutions who serve them. Broadly, the benefits are:

• Speed of Services: Banks can create front-end applications and products quickly without having to redesign their data architecture.
• New Credit Scoring Frameworks: Previously unused data sources like USSD build new and more accurate credit profiles.
• Collaboration: Banks can easily connect with third party financial services adding new benefits and customer value propositions.

What Are The Barriers to Open Banking in Emerging Markets?

In emerging markets, financial institutions have underdeveloped public APIs that provide limited access to a consumer’s financial data. For example, Safaricom’s M-PESA API allows for payment integrations but no access to transaction records or history. Additionally, Open Banking policies such as those implemented by the UK under PSD2 are in their infancy, such as Open Banking Nigeria, established in early 2018. This has led to a highly fragmented financial ecosystem where consumer financial data is spread across many financial institutions, leaving income information, mobile money account transactions, micro-loan history, and credit records within the walled siloes of banks. The lack of financial infrastructure, specifically financial data, limits 2.5 billion individuals ability to access finance globally.

How Is Pngme Working Towards Open Banking in Africa?

Pngme is deploying a Unified Data API that can aggregate financial data from siloed, mobile-based financial platforms including income information, mobile money account transactions, micro-loan history, credit records, and alternative credit scoring data. We create holistic user-permissioned financial profiles by standardizing disparate data sources. Our partners can create personalized financial products at scale, for existing customers and the previously unbanked, while remaining compliant to local privacy and security laws.

We’re currently focusing on onboarding mobile money operators, banks, and microfinance institutions in Ghana, Nigeria, Kenya, and Tanzania. Rigo, ReadyCash, TeasyPay, Migo.Money, and Blue Horizon are among Pngme’s first customers currently scaling their digital lending and banking operations. This is just the start, with the vast amounts of financial data being generated across Africa and further partnerships in the pipeline, we will be bringing banking and financial products to millions of underserved entrepreneurs and businesses.

We believe that everybody deserves equal access to finance and our vision is to bring 2.5 billion financially un/underserved individuals into the global economy by making financial services accessible through an open financial data platform.

Learn more about how Pngme is empowering financial institutions to build a fast, cost-effective digital infrastructure.

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