SAMA Promotes Financial Innovation in Saudi Arabia With a Focus On Open Banking

The Saudi Central Bank (SAMA) is working on strengthening the Saudi Arabian fintech ecosystem, and in doing so, has recognised the potential of open banking. As a result, SAMA has announced the issuance of the second release under the open banking framework, focused on the payment initiation service (PIS).

The new release has been issued as part of SAMA efforts to further strengthen the Saudi Arabian Fintech ecosystem. It is anticipated that the change will enhance overall consumer experience and transaction efficiency. Additionally, it will also open new opportunities for the Kingdom’s fintech sector to offer expanded products and solutions to customers.

SAMA’s open banking framework consists of a set of guidelines and technical standards based on international best practices to facilitate the provision of open banking services in the Kingdom. This second release of the framework standardises how participants can offer PIS reliably and securely. The framework also clarifies the responsibilities of all stakeholders involved in the provision of PIS.

SAMA’s open banking programme is an initiative under the ‘National Fintech Strategy’, one of the pillars of the Financial Sector Development Programme (FSDP) under Saudi Vision 2030. The Strategy was approved by the Council of Ministers in 2022 and aims to make the Kingdom a global fintech hub to enhance the economic empowerment of individuals and society.

The PIS, as part of the open banking framework, helps deliver the Strategy by enhancing the efficiency and security of payment services in the Kingdom. Under PIS guidelines, consumers can initiate payment transactions from within third-party applications in a secure manner. The new release builds on previous guidance which covered Account Information Service (AIS).

​Building on success

In addition to issuing its second release of the open banking framework, SAMA has also advanced the sector by permitting new organisations to test their solutions in its regulatory sandbox. XSquare and NeotTek have been authorised to launch open banking platforms. Meanwhile, MoneyMoon has been approved to launch its peer-to-peer lending platform.

With these additions, the total number of fintech companies currently operating under SAMA’s regulatory sandbox increased to 19. Since its launch in 2018, SAMA’s regulatory sandbox has permitted 50 fintechs to test and refine their offerings in a controlled environment.

This trend underscores SAMA’s continued efforts in developing the Saudi fintech sector and its commitment to promoting financial inclusion and innovation.

The post SAMA Promotes Financial Innovation in Saudi Arabia With a Focus On Open Banking appeared first on The Fintech Times.

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