The Saudi Central Bank announced the launch of its open banking framework yesterday.
The framework includes laws, guidelines and technical standards for banks and fintech firms offering open banking services in the kingdom. The measure is in line with Saudi Arabia’s Vision 2030 economic diversification initiative, the official Saudi Press Agency reported.
What it means: Open banking is a practice whereby a third party gains access to customers’ financial data to offer more advanced and innovative banking services.
The Saudi Central Bank’s open banking framework includes rules entities must adhere to in order to be able to offer open banking services, customer guidelines and technical specifications. The bank also launched an “open banking lab” where banks and fintech companies can test their services in a simulator.
“The lab is designed to foster innovation and speed up the development of open banking in the Kingdom,” read the official website.
Why it matters: Saudi Arabia’s fintech scene is growing and the government wants to foster this growth. In addition to the open banking framework, authorities recently approved some fintech companies to operate in Saudi and also launched a national fintech strategy.
On the other hand, perhaps the biggest challenge to Saudi Arabia’s fintech growth is finding skilled workers.