Saudi Arabia’s central bank, the Saudi Arabian Monetary Authority (SAMA) has announced plans to launch a framework for open banking in the kingdom, which will allow a dramatically new direction for a sector known much more for its “rigid” commitment to stability at the expense of change and innovation.
“With the support of market participants, SAMA plans to go live with open banking during the first half of 2022,”
The regulator made public earlier this week. Experts expect this new move to create remarkable opportunities not just for Saudis, but also for the fintech sector in the kingdom.
Tala Al Jabri, a Saudi national and venture capital investor based between Abu Dhabi and Riyadh, speaking with CNBC, stated that the central bank’s move “is set to revolutionize how customers, merchants and financial institutions augment the value they reap from accessing financial data,”. She expects that this would “open up opportunities beyond financial inclusion by placing greater emphasis on Saudis to become more financially literate and in command of their finances.”
Open banking, which is already in place in numerous countries around the world, allows third-party developers to access customer data (with their permission) from their banks and serve as a connector to financial technology platforms such as apps used for accounting and personal finance. This is the very system which enables payment platforms like Venmo to operate in the US. As a recourse to transparent and regulated open banking, which uses what are called application programming interfaces (APIs), data-sharing becomes possible and customers and businesses can better control their finances, while also accessing advanced financial services. This will break the grounds for fintech services, and also inspire innovation and competition, while providing customers with multiple choices.
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