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Middle East & Africa Reports

Arab Monetary Fund Publishes Collaborative Report on the Future of Open Banking in the Arab Region

The Arab Monetary Fund (AMF), in collaboration with the Arab Regional Fintech Working Group, has published a report titled “A Vision of Open Banking in the Arab World” exploring the role of the financial and banking and sector in enabling and promoting fintech innovation in the Arab region through open banking.

The report aims to a establish an effective collaboration framework between regulators, banks, fintech companies and relevant stakeholders towards achieving a common vision for open banking and open finance that addresses the needs of Arab economies and promotes their growth.

The information presented in this report was derived from a recent survey among 18 Arab Central Banks and Monetary Authorities across the Arab region. The survey focused on the role of the Arab Central Banks and Monetary Authorities in driving domestic growth in open banking by encouraging innovation and promoting the fintech industry, thus creating a sustainable open banking ecosystem in this part of the world.

The report detailed a set of findings and recommendations, reaffirming the role of innovation as a main catalyst of growth for open banking in the Arab region and across the world. The report also stressed the importance of expanding the use of open banking beyond core payment services, to cover all types of financial assets. With this shift, it is now possible to streamline basic financial services such as money transfers and Know-Your-Customer (KYC) checks through limited access to account and payment services

The report highlighted the various factors driving the growth of open banking in the Arab region. While regulation and market dynamics remain the main drivers of growth in Europe and the United States of America respectively, the growth of open banking in the Arab region is primarily driven by market diversity. For instance, whereas some Arab countries focus on the financial inclusion of their underbanked population, other commodity-dependent countries seek to diversify their economies by establishing regional fintech hubs.

The report concludes with a comprehensive vision for open banking in the region, spanning five key pillars: “principles over prescriptions”, “phased implementation”, “consumer data right”, “technical standardisation and interoperability” as well as “level-playing field”. Achieving this vision will require effective and active collaboration between regulators, banks, fintech companies and other stakeholders.

Lastly, the report pointed out the impact of open banking in driving competition across all Arab financial markets, not only among banks and fintech companies but also among the fintech companies themselves. The outcome of which will be an enhanced Arab environment that promotes innovation among banks and fintech companies which will enable economic growth through an improved and inclusive financial ecosystem.

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