Economy
API Architecture: The Invisible Engine Powering Modern Banking
By Echezona Agubata
Banking has evolved far beyond the days of paper ledgers and long queues. Today, it’s a dynamic force driving Nigeria’s economy, responding to customers in real time, and powering digital innovation. The unsung hero behind this transformation is the Application Programming Interface (API)—a tool that lets bank systems communicate seamlessly with each other and external partners.
In Nigeria’s fast-growing digital finance landscape, APIs are the invisible engine enabling banks to offer instant balance checks, process payments at retail checkouts, or verify identities for loan approvals. The secret to their success? A robust API architecture, the structured framework that makes banking secure, scalable, and innovative.
Picture API architecture as a bridge connecting islands of financial services. It allows banks to share data securely. In Nigeria, where digital banking is literarily booming, APIs let banks like Coronation Merchant Bank expand services without rebuilding infrastructure. This flexibility fuels innovation, enabling tailored solutions for everyone from small businesses to large corporations.
The Central Bank of Nigeria (CBN) along with Industry players ensure this ecosystem is secure and trustworthy. Its regulations mandate standards like OAuth 2.0 for authentication, tokenization to protect data, and encrypted channels to safeguard transactions. Real-time monitoring and customer consent protocols further build trust, ensuring data is shared only with permission. These rules aren’t just technical or ethical—they’re the backbone of Nigeria’s open banking system, fostering collaboration and innovation.
How do APIs work? Imagine a well-orchestrated machine. The API acts as
● A Gateway: the gatekeeper to a product. It authenticates requests and ensures only authorized people are granted access to the product. It also helps limit the number of requests that can be made for the product at any given time. For instance, when a bank’s mobile app requests a customer’s transaction history, the transaction history API (as a gateway) verifies access (both customer and mobile app) before treating the transaction history request.
- A Guide: the protocol or security who ensures that even authenticated users are only allowed to access products and data that they are authorized to have
- A Funnell: the pipe that ensures that authenticated users access products and data from known locations/sources to known destinations
- An Agent: the agent that ensures that applications regardless of the service offering have access to data/products in the same way as every other application. This gives unified experience across respective platforms that are consuming the service/data offered by the API
Here’s a simplified view of the flow:
Explanation: An app or corporate system sends a request to the API gateway, which authenticates and routes it. The orchestration layer processes it using endpoints, pulling data from the core system via middleware.
The orchestration layer (behind the gateway) breaks services—like catalog, shopping cart, or ordering—into modular endpoints, like building blocks online shops can share securely. The modular endpoints connect these APIs to core systems, translating the requests into formats that can be processed by the core system. Companies also provide developer portals with clear documentation and sandbox environments, simplifying integration for partners.
This architecture can be built for scale. Banks process millions of transactions daily using load balancing to scale out resources, and distribute traffic in a dynamic fashion. This architecture could incorporate the use of in-memory databases and Queueing technologies to cache frequently used data for swifter processing. More so, this introduces rate limiting features which help isolate any problem areas without affecting the entire service as a whole.
Challenges abound. One of such is the existence of legacy systems as many banks and organizations often rely on decades-old mainframes (core systems), thus requiring a middleware solution to bridge old and new systems—a complex but critical step. Another recent challenge is the need to enforce data privacy expectations, this has made encryption and data masking a necessary action. Encryption in itself comes with its own attendant side-effects especially where applied on data without proper service governance. It can slow performance, so banks and organizations use caching and optimized data flows to balance speed and security. Compliance with CBN guidelines and Nigeria’s data privacy laws demands robust
consent management and audit trails. Versioning APIs (e.g., /v1/payments) prevents disruptions when systems evolve.
Real-world examples highlight APIs’ impact. Coronation Merchant Bank built the Dangote ISOP Collection API to streamline payments for Dangote’s distributors. These payments were previously riddled with slow reconciliations and delayed cash flow. The API integrates payments directly into Dangote’s ERP system and thereby automating the process, reducing errors, and strengthening business ties. Another bank used a KYC API to verify customer identities for loan applications, cutting onboarding time while meeting CBN standards. A third example involves a major Nigerian bank’s payment API, which enables instant corporate transfers for retailers, ensuring funds clear in seconds during peak sales.
APIs are also driving open finance. The CBN’s 2023 guidelines expand APIs to cover credit, investment, and insurance data, enabling embedded finance—loans at retail checkouts or savings tools linked to salary accounts. This makes banking invisible yet ever-present, blending into daily life.
The future is exciting. Banks are adopting API-first design, prioritizing APIs as core interfaces for faster innovation. AI-driven APIs are emerging, enabling fraud detection or tailored loan offers. Blockchain-based APIs promise secure cross-border payments. Event-driven architectures, using tools like Kafka, process real-time events like transaction alerts, boosting efficiency.
At Coronation Merchant Bank, our APIs are business enablers. Our custom solutions, like the Dangote integration, solve real-world problems, while our investment banking desk advises on capital raising and partnerships, helping clients stay competitive. APIs lower barriers, drive growth, and deliver seamless experiences for customers.
Nigeria’s financial future isn’t about who holds the most assets—it’s about who builds the strongest connections between data, money, and people. API architecture is the invisible engine powering that future, creating a connected, inclusive banking ecosystem.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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