Open Banking Makes Foray Into the Middle East

Open Banking Makes Foray Into the Middle East

Globally, initiatives across different jurisdictions have emerged to make open banking a reality, ranging from direct regulatory requirements, like what's been done in the UK and the European Union (EU), to market-coordination and industry-led initiatives such as in the US and Switzerland.

In the Middle East, open banking remains in its infancy with just a handful of startups and so far only one jurisdiction having taken significant steps towards the change.

In the region, Bahrain has been a pioneer in the domain, and was the first country in the Middle East and North Africa (MENA) to introduce regulations requiring all retail banks in the country to adopt open banking.

The regulatory mandates, a landmark for the region, was set by the Central Bank of Bahrain (CBB) in November 2018. It was followed in October 2020 by the launch of the Bahrain Open Banking Framework (Bahrain OBF). The framework includes detailed operational guidelines, security standards and guidelines, customer experience guidelines, technical open application programming interface (API) specifications and the overall governance framework needed to protect customer data.

In parallel, Bahrain has welcomed the first open banking product for the MENA region, with the National Bank of Bahrain (NBB) becoming the first financial institution to adopt