Paytech, Arab Financial Services (AFS) and Brankas, the open finance technology company, have published a new whitepaper, revealing the extent of open banking and open finances’ adoption.
Titled The Future of Financial Services and Trust in the MENA Region, the whitepaper explores different themes surrounding open banking and open finance. From trust to monetisation strategies to adoption, the whitepaper analyses the Middle East and North Africa (MENA) region in depth, while touching on other areas of the world too.
The whitepaper highlights how organisations like Emirates NBD‘s BaaS APIs enable brands like Banque Saudi Fransi to provide financial services, and Mashreq Bank to partner with fintechs and startups. On the topic of partnerships, AFS and Brankas also highlight the importance of collaboration within the fintech industry. They explain that open banking’s success is reliant on organisations from different areas of the fintech world – be it a payment processor, cybersecurity firm or something else entirely – working together.
Open banking offers various pathways for banks to innovate and drive digital transformation. This can be seen by the fact that as of August 2023, over 65 nations have embraced open finance. It is driving financial innovation worldwide. This is especially the case in countries like Australia, India, Brazil and the UK which are extending the data-sharing mandate to non-banking sectors.
Open banking and open finance in MENA
However, the MENA region is also an exciting region to look at. The whitepaper reveals that between 2023 and 2025, countries like Bahrain, Saudi Arabia, and the UAE are expected to see a huge open banking breakout.
“To truly harness the transformative power of open banking, banks must evolve beyond just ticking the regulatory boxes. The real journey begins when we shift our focus from mere compliance to leading the charge in innovation. We must embrace new paradigms, and adapt to the dynamic contours of a rapidly changing financial landscape. It’s about proactively shaping the future, not just responding to it,” said Todd Schweitzer, CEO at Brankas.
A question of trust
AFS and Brankas also explore how firms can build trust through open banking. Although there are questions surrounding authentication, privacy standards and more, the whitepaper explains why clarifying these is key.
According to Statista, the Kingdom of Saudi Arabia (KSA), Qatar, and the United Arab Emirates (UAE) were the fifth, seventh and tenth, most trustworthy regions in the financial sector. This shows the intrinsic faith customers in these countries place in their financial institutions. However, it also spotlights the profound relationship and rapport banks have cultivated with their clientele over the years.
Samer Soliman, CEO – Arab Financial Services said: “Open banking isn’t just a technological trend; it’s the bedrock of tomorrow’s B2B financial landscape in MENA. From the seamless integration of payroll systems and the effortless management of supplier invoices to the swift execution of employee reimbursements, the opportunities open banking brings to the fore are transformative. Furthermore, as financial industry leaders, we should adapt and reshape the financial contours of tomorrow.”