Singapore- In a recent white paper entitled "The Future of Financial Services and Trust in the MENA Region", Arab Financial Services (AFS) and Brankas have shed light on the evolving landscape of financial services in the MENA region, with a strong emphasis on Open Banking and Open Finance. This comprehensive document serves as a beacon for the financial industry, guiding it through the transformative journey of Open Banking and its implications.
The white paper provides valuable insights into the future of financial services in the MENA region, with a particular focus on Open Banking. Here are some of the key takeaways:
Global implications of Open Banking: As of August 2023, Open Finance has been adopted by more than 65 countries, driving financial innovation on a global scale.
Open Banking momentum in the MENA region: The MENA region is gearing up for an open banking surge between 2023 and 2025. Countries such as Bahrain, Saudi Arabia and the UAE are leading the way.
Moving from open banking to open finance: Several countries, including Australia, India, Brazil, and the United Kingdom, are extending data sharing requirements to non-banking sectors, marking the transition from Open Banking to Open Finance and Open Economy.
Opportunities for financial institutions: Open Banking provides multiple opportunities for banks to foster innovation and drive digital transformation, while addressing the necessary levels of readiness.
Collaboration for maximum impact: The success of Open Banking depends on extensive collaboration across the industry, involving key players such as data aggregators, payment processors, cybersecurity firms, and identity verification entities.
The white paper also explores monetization strategies for open banking. These strategies include premium APIs such as Emirates NBD's leading API banking service, BaaS APIs that enable brands such as Banque Saudi Fransi to offer financial services, and innovative marketplaces such as Mashreq Bank's partnerships with fintechs and startups.
"To truly harness the transformative power of open banking, banks must evolve beyond simply checking the regulatory boxes. The real journey begins when we shift our focus from mere compliance to leading innovation, embracing new paradigms and adapting to the dynamic contours of a rapidly changing financial landscape. It's about proactively shaping the future, not just reacting to it. - Todd Schweitzer, CEO, Brankas
Trust plays a central role in the Open Banking ecosystem. The white paper examines the critical elements for building a trust-centric Open Banking environment, including authentication, API security, data protection standards, and more. Notably, the MENA region has emerged as a beacon of trust in the financial sector, with the Kingdom of Saudi Arabia (KSA), Qatar, and the United Arab Emirates (UAE) ranking 5th, 7th, and 10th, respectively, in a 2023 Statista survey. These rankings underscore the high level of trust that customers in these countries place in their financial institutions, and highlight the strong relationships that banks have cultivated with their customers over the years.
"Open banking isn't just a technology trend, it's the foundation of tomorrow's B2B financial landscape in MENA. From the seamless integration of payroll systems to the effortless management of supplier invoices to the speedy processing of employee reimbursements, the opportunities that open banking brings to the fore are transformative. As leaders in the financial industry, our vision should be focused on not just adapting, but reshaping the financial contours of tomorrow. - Samer Soliman, CEO, Arab Financial Services
