Saudi Arabia’s open banking strategy a game-changer
In May 2022, SAMA went live with its open banking initiative, transforming the future of financial technology in the Kingdom and the wider region.
- Initiative enables customers to securely share their data with third parties
CAIRO: Saudi Arabia’s embracing of open banking has transformed the region’s financial ecosystem, according to a top fintech CEO.
In an interview with Arab News, Abdulla Al-Moayed, head of Tarabut, praised the Kingdom’s central bank for its inclusive regulatory impact on the financial sector.
In May 2022, the institution, also known as SAMA, went live with its open banking initiative, which has altered the future of financial technology in the Kingdom and the wider region.
Open banking is a technological innovation that enables customers to securely share their data with third parties.
“Open banking changes the very nature of relationships across the financial ecosystem for Saudi Arabia and for the region as a whole. This is only a good thing,” said Al-Moayed.
Echoing those sentiments, CEO of US-based fintech MoneyHash Nader Abdelrazik, told Arab News: “Open banking (in Saudi Arabia) will significantly catalyze the relationship between banks and fintech, and it will open up a multitude of business use-cases.”
He added: “Banking and finance innovation is highly dependent on access and adoption of open data frameworks. Once these frameworks are in place, not only the existing banks and fintechs will collaborate more, but it will also attract more banks and fintechs to expand to the market and embed their solutions.”
Abdelrazik believes this will increase the economy’s digital sophistication and competitiveness, “but the real winner here is the consumer.”
In its Open Banking Policy report, SAMA said its initiatives focus on “nurturing the rise of digital technologies and their impact on the new financial services enabled by them, as well as building the regulatory framework needed to adopt these initiatives.”
The release further stated: “This opens the door to create and offer new financial services. Therefore, SAMA sees open banking as a pivotal role in the further development of the Kingdom’s financial sector.”
Al-Moayed explained that SAMA’s efforts to standardize application programming interfaces or APIs, are enhancing the country’s monetary platforms, which aim to broaden financial inclusion by facilitating secure, seamless, and affordable access to services and advice.
APIs allow different software applications to communicate with each other, facilitating the integration and sharing of data and functions.
“Standardized APIs enable interoperability between providers, leading to a more cohesive financial ecosystem,” Al-Moayed said.
Open banking changes the very nature of relationships across the financial ecosystem for Saudi Arabia and for the region as a whole.
