April 30th, 2025

Despite the growing significance of data in the financial services sector, there has been little debate on the fundamental public policy issues related to open finance and open data interchanges in Kenya. Open finance refers to approaches to sharing consumers’ financial data across providers and authorised third parties using open application programming interfaces (APIs). This seamless and open transfer and sharing of data, within set safeguards, provides the basis for developing innovative financial solutions and new business models. The United Kingdom and Brazil offer examples of markets whose financial sectors have experienced significant developments that link finance to the real economy sectors due to the application of open finance.

Open finance refers to approaches to sharing consumers’ financial data across providers and authorised third parties using open application programming interfaces (APIs). This seamless and open transfer and sharing of data, within set safeguards, provides the basis for developing innovative financial solutions and new business models. The United Kingdom and Brazil offer examples of markets whose financial sectors have experienced significant developments that link finance to the real economy sectors due to the application of open finance.

FSD Kenya’s work on open finance dates to the conclusion of a banking sector market enquiry by the Competition Authority of Kenya (CAK) in 2017. The enquiry recommended, among others, improvements in consumers’ access and control over their financial information to facilitate innovation, competition, choice and switching. Subsequently, the National Treasury designated CAK to convene a working group to implement the enquiry’s recommendations. FSD Kenya supported this process by facilitating policy roundtables and policymakers’ participation in the Open Banking World Congress that was held in May 2019 in London. Whilst these efforts did not lead to tangible policy outcomes, they were instrumental in demonstrating a vision of how Kenya’s financial sector can and should develop in this area.

In 2023, FSD Kenya, the Kenya Bankers Association (KBA) and the Association of Fintechs in Kenya (AFIK) entered into a partnership to explore the potential benefits of implementing open finance in Kenya. Beyond identifying potential opportunities, the partnership sought to achieve a conception of open finance in the broader national policy agenda. The visibility and importance of this policy agenda was significantly enhanced in October 2023 when FSD Kenya hosted a policy roundtable jointly chaired by The National Treasury and Economic Planning and the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). During the roundtable, it was noted that open finance could reshape Kenya’s financial sector and deliver on economic and social inclusion goals. Following the roundtable, FSD Kenya, KBA and AFIK in 2024 initiated engagements with the banking and fintech sectors to assess their perspectives on open finance and identify viable use-cases for implementation.

The findings from the engagements demonstrated broad support for implementing open finance, with innovation and competition seen as the leading benefits especially in serving small businesses and the agricultural sector. In addition, open finance was seen as key in addressing current challenges in data sharing arrangements that are mainly bilateral and without standardised data sharing templates. Perhaps more significantly, industry perspectives favoured an implementation approach that is led by Kenya’s policy and regulatory authorities.

The main risks perceived by the industry included slow policy processes, concerns over data security especially with smaller players and the risk that larger players will not be incentivised to participate in open data sharing approaches. A phased approach which starts with mandatory participation at the beginning for certain players was favoured.

These findings will form the basis of engagements with policymakers to broaden support for the policy proposals required to support implementation. At minimum, there should be consensus on the fundamental elements required to successfully implement open finance in Kenya.

This work demonstrates FSD Kenya’s approach to market development not only as a catalyst for change but as a market facilitator that works with and through others in building a stronger evidence-based voice for policy change that favours Kenya’s development aims.

This blog is one of the articles in FSD Kenya’s 2024 annual report. Click here to read the full report (PDF). 

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