The Open Banking Lab seeks to foster innovation and accelerate the development of Open Banking services in the Kingdom of Saudi Arabia as it serves as one of the most important technical enablers of the Open Banking ecosystem in the Kingdom. The lab will provide banks and fintechs with a technical testing environment to enable them to develop, test, and certify their Open Banking services to ensure compatibility with the Open Banking Framework.
Open Banking services is a concept in the financial industry that seeks to allow the consumers of financial institutions to securely share their financial data with third-party provider, which in turn provides new and innovative financial services and products for consumers. Open banking services positively impact the industry by improving the partnership between banks and fintechs and improving the financial infrastructure to guarantee better use of consumers’ financial data, FF News states.
The implementation of Open Banking services is one of the initiatives of the Fintech Strategy, one of the pillars of the Financial Sector Development Program (FSDP) under Saudi Vision 2030. The Fintech Strategy was approved by the Council of Ministers in May 2022 and aims to make the Kingdom a global fintech hub where technology-based innovation in financial services is the foundation to improve individuals' economic empowerment and society.
In November 2022, the Saudi Central Bank introduced the Open Banking Framework, which includes a comprehensive set of legislation, regulatory guidelines, and technical standards based on international best practices to enable banks and fintechs to provide Open Banking services in the Kingdom. 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).
Saudi Central Bank is tracking the development of banks and fintechs to ensure their readiness to launch open banking services within the first quarter of 2023.
In the Open Banking and Open Finance Report 2022, Serena Sebastiani from PwC Middle East shared insights into the Open Banking state of affairs in the Gulf Cooperation Council (GCC) region, including Saudi Arabia. For more information, we invite you to download the report.
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