Summary Note on Open Banking Policy Issued by the Saudi Central Bank
The Central Bank of the Kingdom of Saudi Arabia (known as “SAMA”) announced its preliminary open banking policy on 10 January 2021. The policy was introduced on the back of recent moves by SAMA to bring innovation to the financial and banking sectors, including the launch of a fintech regulatory sandbox and the introduction of regulation governing payment service providers, in line with the Kingdom’s Vision 2030 agenda and the Financial Sector Development Program.
The open banking policy will allow consumers to share their data with third parties in a secure manner. Potential benefits of this include the facilitation of payments, aggregation of financial data, and access to better financial products and offerings. According to the published policy, SAMA’s journey to launch is in three different phases: The first phase will focus on the design of the open banking ecosystem and the governance of the market participants (a majority of which will likely be SMEs). This will be followed in the second half of 2021 by the implementation phase, which will include testing with financial market participants and an enhancement of customer’s awareness. Lastly, the system will be fully formed and will go live by 2022.