Saudi Arabia Central Bank launches open banking framework

The Saudi Central Bank (SAMA) has issued an open banking framework as one of the major outputs of its Open Banking Programme, which enables banks and fintech platforms to avail open banking services in the Kingdom.

The Open Banking Programme comprises a set of legislation, regulatory guidelines, and technical standards based on international best practices.

At present, the bank is also keeping track of the development of banks and fintech platforms to analyse their readiness in terms of launching open banking services within the first quarter of 2023.

In a report by Wamda, the first version of the open banking services focused on the Account Information Service (AIS), and the second version will focus on the Payment Initiation Service (PIS).

A novel concept in the financial industry, open banking refers to the practice of financial institutions sharing customer data with a third-party provider, which in turn makes resourceful financial services and products available for customers.

This programme is one of the initiatives of the Fintech Strategy—approved by the Council of Ministers this year. It is one of the pillars of the Financial Sector Development Program (FSDP), under Saudi Vision 2030.

Its aim is to make Saudi a global fintech hub where tech-based innovation in financial services. The larger goal is to enhance the economic empowerment of individuals and society.

Under SAMA regulatory sandbox, SAMA has also permitted a number of Fintech platforms to provide open banking services.

The launch of open banking framework is likely to support more fintech startups to establish their presence in the Kingdom.