KPMG Report: Banks warned to modernise Core Systems ahead of Open Banking

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KPMG has called on banks and financial institutions in Nigeria to accelerate their preparedness ahead of the launch of open banking in the country. According to a report by KPMG titled “Modernising Core Banking Systems: Navigating challenges to achieve resilient transformation”, the Central Bank of Nigeria (CBN) is set to launch open banking in August 2025.

The report highlights the potential benefits of open banking, including increased financial inclusion, improved customer experience, and innovation in financial services. “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,” the report stated.

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Open banking allows customers to authorise their banks or financial service providers to share their financial information with other participants within the financial services system, enabling the development of more customer-centric services and financial products. With open Application Programming Interfaces (APIs), participating banks and other financial institutions will be able to access information on other participants’ financial products and services, as well as personal information, transaction history, credit scores, and income ratings.

The report emphasised the need for banks to ensure the readiness of their core technologies and operational processes to support open banking. “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 noted that open banking will impact data mobility and control, allowing customers to securely share their financial data with third-party providers and facilitating access to personalised financial services. “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.

The firm also highlighted the shift in the financial services landscape across West Africa, where digital banking is becoming the default and customer expectations are accelerating 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,” the report stated.

In conclusion, KPMG emphasised the importance of modernising core banking systems to support the demands of the future. “For incumbent banks, the question is no longer whether to modernise their core platforms, but how to do so effectively.

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