Saudi Arabia could soon have a new regulatory framework for open banking, according to a new announcement by the Kingdom’s central bank SAMA.
The announcement came via a policy paper issued by the central bank where it described open banking as one of the most critical components of its mission to further improve the country’s financial sector. A smooth implementation of the new policy could trigger a new wave of innovation and financial inclusion, the policy paper hinted.
The primary objective of open banking is to encourage greater financial transparency using open application programming interfaces (API).
Additionally, it also allows third-party developers to access consumer data collected and stored by the banking system.
“With the support of market participants, SAMA plans to go live with open banking during the first half of 2022,” the policy paper stated.
It is worth noting here that Arab banks have been traditionally reluctant towards sharing their customer data with third-parties. With that into consideration, it will be interesting to see how SAMA plans on moving ahead with its plans to embrace open banking solutions if the banks under its wings do not back the initiative.
