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By Fintech Association Of Kenya

 Kenya is positioned to implement an open finance ecosystem that would enable consumer-led data sharing across the financial industry, with industry consultations revealing strong support for a partially mandated approach with joint governance between policymakers and the private sector. The financial sector sees significant benefits in innovation, competition, and improved services for key economic segments like small businesses and agriculture, with payments, mobile money, banking, and non-bank digital lenders identified as essential components for the first phase of implementation.
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Kenya’s enabling environment—including appropriate regulations, widespread mobile money adoption (82% of adults), and existing interoperable payments—provides a strong foundation for open finance to expand quickly, though current data sharing arrangements suffer from inconsistent formats, fragmented practices, and complex integration processes.

A recent Open Finance Workshop hosted by FSD Kenya, The Kenya Bankers Association, and The Association of Fintechs in Kenya brought together industry leaders to chart the course for our open finance future. It outlined critical implementation considerations including data priorities (payments/mobile money accounts, identity/KYC verification, deposit accounts, and credit information), governance models (favoring mixed approaches with public and private collaboration), and rule frameworks for data reciprocity, pricing, and liability.

Drawing lessons from global markets like Brazil, India, Korea, and Australia, the workshop and framework emphasizes the need for standardized APIs and data formats, clear performance metrics, robust dispute resolution mechanisms, and appropriate pricing models—with industry stakeholders divided on whether data exchange should be free, fixed-price, or market-determined. Success will depend on addressing these considerations while ensuring strong consumer protection, data security, and financial inclusion outcomes.

Key Issues

  • Data standardization and security
  • Governance models and implementation approaches
  • Pricing and monetization strategies
  • Liability frameworks in open finance ecosystems

Global Insights

  1. 🇮🇳 India: Account Aggregator framework linking 64M+ accounts, showcasing rapid adoption
  2. 🇰🇷 South Korea: 54.8M users by Sept 2022, nearly 4x growth in 9 mont
  3. 🇧🇷 Brazil: 43M+ accounts linked, demonstrating success in phased implementation
  4. Kenya’s Unique Position:
  • -Strong mobile money ecosystem (82.4M accounts) as a foundation
  • Potential to address the $19.3B MSME finance gap
  • Opportunity to leverage existing digital infrastructure for faster implementation

Industry Perspectives

  • Preference for a phased mandatory model to ensure standardization and market coverage
  • Banking and payments are seen as essential for Phase One
  • Mixed governance approach favored, combining government oversight and industry expertise

Next Steps

  • Develop clear rules for data reciprocity, pricing, and liability
  • Foster collaboration between policymakers, regulators, banks, Insurers, Fund Managers, fintechs, other non-financial services organizations and telcos
  • Focus on consumer awareness and trust-building initiatives

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