A transformational shift in MENA’s financial services sector has been set in motion following the launch of Open Banking products by several banks in Bahrain. Hence, encouraging other jurisdictions to follow suit.
In December 2019, Bahrain launched the first Open Banking product in MENA, which initiated a mindset shift that is driving financial institutions to embrace a new world of Financial Services. The Open Banking revolution in MENA has been kickstarted by the Central Bank of Bahrain, making it the first in the Middle East, to introduce regulations that mandated the adoption of open banking by all retail banks. This was a significant benchmark in the region's financial sector.
The advent of open banking, mandated in 2019, positions Bahrain at the heart of the Open Banking revolution and emphasizing its pioneering role in the FinTech sector. The banking sector will, in turn, develop data-driven and frictionless, customer-centric experiences that will empower consumers across MENA. Various Open Banking awareness campaigns have been rolled out in the region, including educational campaigns, a virtual resource hub, and new job opportunities within the FinTech sector.
Over the past 7 months, the Kingdom has witnessed several banks investing in Open Banking products that are powered by Tarabut Gateway; MENA’s first licensed Open Banking platform. Financial institutions throughout the region will soon be able to offer account aggregation services, and a range of new Open Banking services within this year. These strategic partnerships with Tarabut Gateway have set in motion a move to a new way of banking and will support banks in Bahrain to create more seamless and intuitive banking experiences.
Recently, the Fintech Startup Ecosystem in Bahrain was ranked among the fastest-growing sectors in the Middle East. Open Banking will drive simplicity and increase flexibility within the financial landscape, allowing financial institutions to leverage the rich data they have to offer customers innovative and targeted products that best suit their needs.
This, in turn, will empower bank customers across the Kingdom to take control of their finances, make better decisions, and manage multiple accounts through a single application. Open Banking will accelerate collaboration between financial institutions and FinTechs in MENA and will fundamentally transform the current banking experience into a more intuitive and personalized experience. With detailed insights and more data points becoming accessible, banks will now be able to offer better financial products and services for their consumers. These personalized insights will increase engagement, sales, and overall revenue for the bank when utilized efficiently. Hence paving the way to a new world of financial services.
Dalal Buhejji, Director of Business Development, Financial Services at Bahrain Economic Development Board (EDB) said: “We are witnessing rapid shifts within MENA’s Open Banking scene. Bahrain is a global leader and is consistently improving the frameworks to facilitate and support the transformations taking place. This will drive greater competition and more rapid adoption in other global markets as well. Our innovative focused regulations and thriving FinTech ecosystem have made it possible to set new standards for digital banks in the region in less than a year.
Banks are starting to see Open Banking as an opportunity here, and this mindset will attract new developments and innovations in the banking industry. These successful milestones will make the transition to better banking and financial experiences more seamless and efficient. The financial industry can only transform by integrating forward-thinking regulations and strategic alliances with all the major players in the sector.”
Kunal Varma, Head of Retail Banking (Middle East), Standard Chartered Bank, “Bahrain is playing a leading role in delivering on its open banking promise across the region. These collaborations will allow banks in the region to harness innovative technologies while leveraging the rapidly evolving ecosystem of data sources to deliver digital-only experiences. The Fintech sector in Bahrain is rapidly growing, and especially at this time, there is a need to deliver innovative propositions. This shift will encourage other banks to offer solutions that enable greater transparency and inclusivity.“
Abdulla Almoayed, CEO of Tarabut Gateway commented on the progress in the region “Open Banking is one of the most exciting developments in the financial services sector and has been an interesting journey for us for far. We are pleased to see banks regionally recognizing the importance of adopting this technology and realizing the impact it brings for its customers. This shift will develop Open Banking case studies for the MENA region, which will encourage others to join. We want to be part of that journey and play our role in MENA as the trusted Open Banking partner for financial institutions and FinTechs in the region.”
Fintech continues to grow exponentially in Saudi Arabia, with the Kingdom's market expected to reach transaction values of over USD 33 billion by 2023! Access more trends and data in the recently launched Fintech Saudi Annual Report 2019-2020.