Why Open Banking Isn’t Enough: Designing Inclusive Financial Ecosystems in Emerging Markets

Open banking is often positioned as a breakthrough for financial inclusion especially in emerging markets. But let’s be clear: data access is not financial access.

In markets like Africa, where more than 57% of adults remain unbanked according to World Bank (2022), open APIs alone don’t solve systemic problems. They don’t reach the informal trader, the mobile-only customer or the microentrepreneur navigating a cash-first economy.

To truly transform access, we must go beyond tools; we must build inclusive financial ecosystems designed for the realities on the ground as I have discussed in my previous post.

What Open Banking Enables and What It Doesn’t

Open banking gives consumers the ability to share their data securely with third-party fintech platforms, enabling benefits like:

1. Personalized credit scoring from mobile money or transaction history

2. Frictionless KYC and faster onboarding

3. Embedded finance and digital savings tools

4. Account aggregation and multi-banking

But in Africa’s fintech ecosystem, the biggest problem isn’t just the limited access to user data but the absence of it. Most low-income and informal workers have no formal financial history. That means APIs can’t do much because they’re pulling from an empty well.

The Gaps in Financial Inclusion

Here’s what open banking doesn’t fix:

1. Lack of national digital identity systems

2. Limited or nonexistent credit bureaus

3. Gaps in regulatory infrastructure

4. Low smartphone penetration in rural areas

5. A gender gap in financial access, where women are 33% less likely to own a bank account in Sub-Saharan Africa

6. Security and data protection challenges

7. Upgrading core systems and developing secure APIs is costly

In Nigeria, for instance, less than 10% of adults have access to credit via formal institutions. So while fintech growth is accelerating in urban hubs, millions still live outside the rails of innovation.

Building Financial Ecosystems, Not Just APIs

The real transformation happens when we connect infrastructure, policy, and products into an integrated system. We need agent networks that reach remote areas, financial literacy tools built in local languages, mobile-first platforms that don’t require smartphones, collaboration between regulators, founders, telcos, and banks. African fintech revenues are projected to grow from $10B in 2023 to $47B by 2028 reported by McKinsey (2023).

Digital innovation without a strong foundation is like building bridges to nowhere. The future isn’t just open banking but also more importantly open and accessible ecosystems.

What Founders and Funders Must Prioritize

For Founders:

Design for the informal economy, not just tech-savvy users. Build trust mechanisms into the product (e.g., human agents, social referrals), while using alternative data to assess creditworthiness

For Funders:

Fund infrastructure, not just apps; investing in startups solving for last-mile inclusion. You also need to back more women-led fintech ventures with local insight

Open banking is a step to facilitate inclusive fintech. Let’s build financial systems that work for everyone, from the ground up.