of Central Bank of Saudi Arabia (SAMA) launched the “Open Banking Lab” in line with the Open Banking Framework published in November 2022.
SAMA’s Open Banking Lab aims to foster innovation and accelerate the development of open banking services across Saudi Arabia. The lab will provide a “technical testing environment” that will enable the development and testing of open banking services. This test also confirms compatibility with SAMA’s open banking framework.
What does the Central Bank’s Open Banking Framework cover?
of open banking framework It is divided into sections intended to ultimately set laws, regulatory guidelines, and technical standards for the local open banking industry. The main sections are:
- Glossary: Contains definitions of all important terms used in the framework.
- Use Case: The framework has Open Banking Evaluation and Prioritization Frameworkalong with a list of use cases that we aim to enable with each new release.
- Business rules: This section aims to provide clear instructions on the requirements that banks and fintechs must follow when offering open banking services.
- KSA standard: The criteria set will be created using an existing criteria. Customer Experience Guidelines, API specification, implementation requirements When Operational guidelines.
The Saudi Central Bank’s new Open Banking Lab provides a sandbox environment that simulates a real bank’s Open Banking API. Sandboxes support innovation while encouraging financial institutions to constantly consider frameworks.
Fintech strategy in Saudi Arabia
The kingdom continues to devote a lot of resources. Saudi Vision 2030Overall, the strategic framework aims to reduce the country’s dependence on oil and diversify its economy while developing the public sector.
Part of the framework is that Financial Sector Development Program (FSDP). One of the main pillars of the program is Saudi Arabia’s fintech strategy to make Saudi Arabia a global fintech hub. We believe that strengthening fintech in the region will financially empower not only Saudi individuals but also society. Ultimately, the aim is to improve the economy as a whole through such developments.
Open banking allows consumers at financial institutions to securely share their financial data with third-party providers. This will enable businesses to offer consumers new financial services and products. SAMA also explained that it believes open banking services will strengthen partnerships between banks and fintechs. He also said that open banking would improve financial infrastructure and make better use of consumers’ financial data.