Open Banking is the secure way to give providers access to your financial information; it provides a platform where the customer has more control of their banking information and finances. Open Banking enables personalisation and loyalty to consumers, driving further innovation and ecosystem collaboration between fintechs and banks.
The global open banking market size accounted for US$7 billion in 2018, and is expected to reach US$43 billion by 2026, registering a CAGR of 24% from 2019 to 2026.
A global standard, UK’s government directed the largest financial institutions to implement open banking, and now besides regulators, other participants in this ecosystem are UK’s largest banks and building societies, card companies, hundreds of fintechs, consumer and small business groups, and advisory groups. “Open banking helps citizens and small businesses make better decisions. Decisions about the things that really matter to them: How much should I save? How much can I spend? Should I borrow? It helps them figure out which financial products are best for them. Fundamentally, open banking is delivering a public good.”
In the MENA region, Bahrain took the lead in open banking and began its journey in 2018 with the regulator issuing an open banking framework in 2020. Saudi Arabia’s central bank is working on its policy and design of an open banking platform and plans to launch in 2022. On 1 June 2020, the Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC), and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), jointly launched a four-week public consultation on “Guidelines for Financial Institutions Adopting Enabling Technologies”. “The objectives of these guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed. In drawing up the guidelines, the regulators have considered both international standards and industry best practices.” There is a high expectation in the industry that open banking regulations and framework will soon follow.
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