Saudi Fintechs Get Green Light For Open Banking Practices
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The Saudi Central Bank (SAMA) has announced that it has authorized “New Technology for Software Solutions” and “Seen Square Fintech” to carry out open banking activities. The bank also permitted “Money Moon” to handle peer-to-peer investment activities and all these companies will work under the special rules of the legislative sandbox.
With these new approvals, the total number of firms allowed in the legislative sandbox is now 19, and the total number of businesses that have joined since it started in 2018 has reached 50.
The Bank Aims To Boost New Ideas In The Financial Service Industry
This statement is part of the Saudi Central Bank’s plan to speed up growth in the financial technology industry. The bank also wants to reach its goals to boost new ideas in the financial industry and improve financial inclusion, so that everyone can have access to financial services.
SAMA noted that it is important to work with financial institutions that are approved by SAMA, and this can be checked on the website.
Earlier this week, SAMA announced that it has put out the second update of its Open Banking Framework, which is about payment initiation services (PIS).
The bank introduced the first edition of Open Banking services, which was about account information services (AIS), in November 2022.
Financial technology companies and banks in the Kingdom of Saudi Arabia (KSA) were supposed to get ready to introduce Open Banking services by the first three months of 2023.
Saudi Central Bank Seeks To Establish Clear Standards For Providing PIS
The second major update to the framework aims to set a standard for how players can provide Payment Initiation Services (PIS) in a dependable and secure manner. It also clarifies the roles and responsibilities of everyone involved in delivering PIS.
In a statement, SAMA announced that the new update is part of its efforts to bolster the Saudi Arabian fintech ecosystem. The team expects this change to improve consumer experience and transaction efficiency. It will also create new opportunities for the Kingdom’s fintech sector to offer more products and solutions to customers.
The framework provides technical standards and guidelines based on global best practices to support Open Banking services in Saudi Arabia.
The central bank’s Open Banking Program is part of the National Fintech Strategy, which is a key element of the Financial Sector Development Program under Saudi Vision 2030.
According to SAMA, the Fintech Strategy, approved by the Council of Ministers in 2022, aims to position the Kingdom as a global fintech hub. The goal is to enhance economic empowerment for individuals and society.
SAMA noted that the Payment Initiation Services (PIS), as part of the Open Banking Framework, supports this strategy by improving the security and efficiency of payment services in the Kingdom.
