SAMA, the Saudi Central Bank (previously known as Saudi Arabian Monetary Agency) has issued its Open Banking policy, listing the objectives and benefits for the local financial sector. The move is part of a series of initiatives that SAMA has introduced over the last three years to create and grow a fintech ecosystem in the Kingdom.
“The issuance of this policy builds on the efforts of SAMA in diligently pursuing the strategic objectives of the Financial Sector Development Program, underscoring its commitment to promoting innovation, and trust within the sector, re-enforcing competition and raising efficiency,” said the government organization in a statement.
Open Banking is a practice where banks share their customer data including account details, transactions, and other details securely with third-party financial services providers like fintech players through the use of APIs. This is done with the consent of the customers.
In the policy, SAMA highlights that the initiative will enhance trust in both customers and market participants including banks, fintech platforms, and other financial players, adding that all stakeholders have a pivotal role in the journey toward innovation and financial inclusion.
SAMA plans to go live with the Open Banking initiative in the first half of 2022. For the next 12 months, it will work on the design of Open Banking ecosystem and its implementation, which will include testing with financial ecosystem players.
In the next 18 months or so, SAMA said that it will work with the participants of the financial market to construct the Open Banking ecosystem.
It’s a welcome development for the entire financial ecosystem of Saudi Arabia, but the biggest beneficiaries might be the three startups building the rails for Open Banking in the region—Lean from Saudi Arabia, Dubai-based Dapi, and Bahrain’s Tarabut Gateway.
The full policy can be read here (PDF) on SAMA’s website.