Kenya Set to Implement Open Banking Framework

The Central Bank of Kenya (CBK) is proposing legislation that would require banks and payment providers to share customer data with licensed third parties, potentially transforming the country’s digital payments landscape. The draft National Payment System Bill 2026 aims to establish an open finance ecosystem in one of Africa’s largest mobile money markets.

The proposed rules would mandate that payment providers build systems capable of securely sharing customer data for “open finance purposes” once customers provide consent. This could allow licensed fintech companies access to banking and M-PESA account information, creating new competition without requiring them to own the underlying accounts.

Key Provisions of the Bill

  • Data Sharing Mandate: Payment providers must build systems that can securely share customer data with authorized third parties.
  • Central Bank Oversight: The CBK would have the power to require data sharing after customer consent and issue regulations governing access mechanics.
  • New Fintech Categories: The bill establishes two new categories of licensed fintechs:
    • Payment initiation service providers (can execute payments on behalf of customers)
    • Account information service providers (can pull data for a unified view across accounts)
  • Interoperability Requirements: All financial and payment providers must use compatible systems to enhance competition and innovation.

The bill also includes provisions requiring electronic money issuers and wallet providers to keep customer funds in trust accounts at banks, ensuring consumer protection while fostering greater data accessibility. If enacted, the law would give Kenya one of Africa’s most advanced open finance frameworks, potentially unlocking significant economic opportunities while raising important questions about data security and privacy.

Industry experts predict this could lead to a surge in fintech innovation as companies develop new services that leverage broader access to financial data, transforming how consumers manage their money across multiple platforms.