While Kenya leads with PesaLink and Nigeria pushes forward with its Open Banking framework, Uganda’s banking sector stands at a crossroads. The question is not whether to adopt Open Banking APIs, but how quickly we can move.
Uganda’s financial landscape is unique. Mobile money usage is widespread, with over 33 million registered accounts, while only about 35% of Ugandans hold formal bank accounts. Traditional banks are steadily losing ground to telcos. Open Banking APIs could help rebalance this by allowing banks to innovate and meet customers where they already are.
Ugandan banks have clear opportunities to leverage Open Banking APIs by integrating more deeply with mobile money platforms to enable services like real-time balance checks, automated savings, and instant loan disbursements; supporting agriculture by linking to commodity exchanges, weather data, and market prices to design dynamic, lower-risk loans for farmers; and helping SMEs manage cash flow by aggregating data from multiple sources to provide a full financial picture and enable faster, data-driven credit decisions.
Technical Considerations:
– Security First: OAuth 2.0 and OpenID Connect should be standard. Every API call needs encryption, authentication, and audit trails.
– Start Small: Begin with read-only APIs such as balance inquiries and transaction history before moving to payment initiation.
– Standardization: Adopt international formats like ISO 20022 from the start, rather than trying to retrofit later.
– Rate Limiting: Implement throttling to prevent overload, for example starting with 100 requests per minute per client.
If Ugandan banks want to stay ahead, they need to move quickly on Open Banking. The first movers will capture the unbanked and underbanked, while those who delay will be left fighting over fewer traditional customers. The good news is that the groundwork is already in place. The National Payment Systems Act provides a clear regulatory framework, FSDU is encouraging innovation, and with 4G coverage, rising smartphone use, and BOU’s ACH clearing systems, the infrastructure is ready. What is needed now is action.
Banks should come together to set standards, work with fintechs to test ideas, launch pilot projects, invest in API management tools, and build strong teams with the right skills in security and integration.
In the end, the banks that will lead Uganda’s future will not be the ones with the most branches but the ones with the best APIs.