The Open Banking market across Arab Countries to grow by 25% annually over the next five years, The Arab Monetary Fund (AMF) said in a report issued today 24 October 2023, presenting guidelines for an “Effective Open Banking/ Finance Adoption”. The report was produced by members of the Arab Regional Fintech Working Group (WG) in collaboration with 10 Arab Central Banks and regional Open Banking firm Fintech Galaxy. The guide was released in line with the Fund's endeavours to support Arab central banks in their journey to adopt an effective framework for Open Banking/Finance schemes.

The "Guidelines for an Effective Open Banking/ Finance Adoption" explores the landscape of Open Banking/Finance in the Arab region, highlighting key developments and associated challenges in several Arab countries, including Jordan, UAE, Bahrain, Saudi Arabia, Iraq, Oman, Palestine, Kuwait, Egypt, and Morocco.

It also dives deep into global regulatory frameworks surrounding Open Banking/ Finance, best practices from leading jurisdictions, requirements and prerequisites for adoption, challenges in deployment, lessons learned from global adoption, and recommendations for a successful implementation and financial inclusion enhancement.

An effective Open Banking/Finance regulatory framework takes into consideration diverse aspects to provide a sound foundation for the Open Banking ecosystem. These include a definition of Open Banking, types of participants, the scope of data to be shared, data access and sharing requirements, consent mechanism and informed consent, data security, identifying the regulated Third Party Providers (TPPs), access to TPPs, licensing of diverse services providers, operational and technical requirements, consumer safeguards, governance scheme for the implementation of the Open Banking/Finance framework and Application Programming Interfaces (APIs), standardization of APIs, as well as standardization of contractual terms with non-regulated entities.  

To embrace Open Banking/Finance, authorities need to incorporate relevant frameworks and enable the market to leverage the potential of Open Banking and APIs to deploy several use cases, including account aggregation, credit scoring services, digital identity verification, remote customer onboarding, digital lending, personal financial management, account-to-account payments for large purchases, as well as Buy Now Pay Later (BNPL) arrangements.

The report draws some lessons learned from global experiences, stressing that most Open Banking regulations have been released after consultation and deep dialogue with stakeholders.

It also provides a step-by-step and practical guide, along with the concerned stakeholders, outlining the key considerations and actions needed to establish successful Open Banking/Finance frameworks. It also highlights that Open Banking/Finance framework should be tailored according to each country’s specific conditions, its financial digital infrastructure, levels of readiness and progress, as well as respective legal and regulatory frameworks.

Commenting on the guide, His Excellency Dr. Abdulrahman Al-Hamidy, Director General Chairman of the Board of Arab Monetary Fund, praised the initiatives of the Arab Reginal Fintech WG in issuing the guide and recommended it as a source of valuable insights for Arab countries in implementing efficient Open Banking/Finance frameworks.

Mirna Sleiman, Founder and CEO of Fintech Galaxy, highlighted that "Prepared in partnership with Fintech Galaxy and Central Banks from various Arab countries, this guideline offers a roadmap that everyone can learn from and grow with as it simplifies complex concepts and helps fast-track Open Banking adoption across the region. The collaborative approach aims to share best practices, present new opportunities and create value to all parties.”

You can download the Guide by clicking on the following button:

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 About Fintech Galaxy:

Fintech Galaxy is a regional Open Banking platform that aims to democratize financial services by providing a reliable and secure API infrastructure for integration between industry players while placing more control of financial data and payments into the hands of end customers. Fintech Galaxy is regulated by the Central Bank of Bahrain. Fintech Galaxy was founded with a mission to move the needle in financial inclusion and currently operates in the UAE, Bahrain, Egypt, Saudi Arabia, Lebanon and Moldova.

More on www.fintech-galaxy.com