The Saudi Monetary Authority (SAMA) is introducing an open banking policy to advance digital innovation within the financial services sector.
Saudi Arabia’s financial institution said the plan is for open banking to travel sleep in the primary half 2022. Through the initiatives within the policy, the goal is to foster the advancement of digital technologies and make new financial services and products.
Open banking, which is employed across numerous countries, facilitates the connections and permissions between users’ banking data and third-party financial platforms. It enables the secure sharing of monetary and other data to enable seamless digital payments and money transfers.
“Open banking will cause direct innovation by enhancing opportunities to develop new products and services — either ‘in-house’ or together with third parties – to extend financial players’ value proposition and make additional revenue streams,” consistent with the policy document.
Aside from providing banking customers within the Kingdom with how to securely manage and share financial data, open banking also will give people access to custom products and services. The policy is additionally intended to enhance trust among all stakeholders during a financial relationship.
Open banking is anticipated to extend competition within the country by lowering the barriers to entry for brand spanking new participants. Through the event of latest financial products customized to specific customer segments, the initiative is additionally intended to cause financial inclusion in Saudi Arabia , consistent with the report.
This initiative aligns with priorities set for both Saudi Vision 2030 and for the Financial Sector Development Program (FSDP). Goals include developing a digital economy and fostering private sector growth to encourage participation by more entrepreneurs.
In a PYMNTS interview, Frank Dux, director of CoCoNet, said that although FinTech innovators advance competition and improve the end-user experience, corporations often struggle with outdated tools. The mindset is that companies will stick with their financial institutions because it’s an excessive amount of of a hassle to modify , albeit it means having outdated products.
