Promoting open finance frameworks generates great opportunities for enhancing digital financial services and financial inclusion
Open finance addresses the challenges of data fragmentation and maximize the potential value of financial data
The paper highlights, the areas and depth of regulatory interventions, the needed types of technological standards and the operational standards covering system responsiveness, to implement open finance
The Arab Monetary Fund (AMF) issued today Monday 6 December, 2021, a paper on “Open finance: A framework for the Arab region is more than a question of scope”, summarizing the results of a collaborative study conducted by the Arab Regional Fintech Working Group (WG), which AMF acts as the technical secretariat of the group’ and the MENA Fintech Association. The paper is issued under the framework of the Fund's endeavours to promote awareness of the requirements for developing banking and financial industry, while supporting digital financial transformation efforts in Arab countries.
The paper aims to craft the transition from open banking to open finance, beginning from the areas adjacent to payment accounts and covering the whole financial services, highlighting the needs for additional considerations to accommodate the cross-sector functionality of open finance, and providing insightful answers on how open banking can improve the efficiency of a border financial ecosystem and support digital financial inclusion in the region.
The paper elaborates on the constructive role of open finance in addressing the challenges of data fragmentation by providing a secure and efficient means for customers to allow businesses to share and use customer data across a common framework.
The paper refers to developments in the Arab region and main use cases such as financial management and pension planning, credit provisioning, as well as KYC verification, referring to the AMF’s survey on Open Banking that was conducted in the year 2020.
Moreover, the paper provides sets of guidance covering (i) the areas and depth of regulatory interventions, (ii) the types of technological standards that are needed, (iii) operational standards covering system responsiveness, and (iv) cultural shift to ensure extensive participation among stakeholders particularly data providers and customers.
Noting that, the paper was prepared by experts from regulators and service providers, members of the Arab Regional Fintech Working Group, and the MENA Fintech Association. It has been reviewed by representatives of Arab Central Banks and Monetary Authorities members of the group.
Commenting on this insightful paper, His Excellency Dr. Abdulrahman Al-Hamidy, Director General Chairman of the Board of Arab Monetary Fund, praised the initiatives of the Arab Reginal Fintech Working Group in issuing policy notes and providing advice to the relevant authorities in the areas of Fintech, strengthening digital financial services, and supporting innovations and access to formal financial services. H.E referred to the great opportunities resulting by embracing open finance and expressed his wishes that the paper would contribute to raise awareness of deploying such technologies. Finally, H.E stressed on the importance of the ongoing cooperation of the Arab Reginal Fintech Working Group with international organizations, research centers and universities.
You can download the paper by clicking on the following link