Exclusive Banking & Finance Dubai’s Tarabut points way for open banking in GCC By Andy Sambidge August 10, 2023 Unsplash/Joshua Mayo Open banking allows financial data to be shared between banks and third-party apps such as payment services Open banking allows for sharing of financial data Tarabut raised $32m in Series A New CFO Tariq Sanad plans Gulf expansion The new chief financial officer of open banking platform Tarabut Gateway sees “exciting times ahead” as the company focuses on expansion in Saudi Arabia. It is also hoping to enter other Middle East markets. Open banking allows for financial data to be shared between banks and third-party service providers through the use of applications. Similar to how streaming service Netflix makes suggestions on what shows you might want to watch, open banking aims to guide banking customers on where they can invest and save money. ‘Hi, this is your bank…’ Inside the war on payment fraud Visa makes first Mena open banking investment Saudi takes fintech to ‘new level’ with Open Banking Lab CFO Tariq Sanad, a Bahraini national, said further expansion of open banking in the Gulf and wider Mena region is on the cards once government regulations are put in place. He joined Dubai-based Tarabut in June, following its $32 million Series A fundraise. Sanad will initially focus on supporting expansion in Saudi Arabia, where the company was one of the first to receive certification from the Saudi Central Bank. Tarabut has so far partnered with leading lenders such as Saudi National Bank and Riyadh Bank, and further discussions are ongoing. “We’re in talks with pretty much everyone at this point in time,” Sanad told AGBI. “I think that the key to our success is about partnering, that we are an enabler for the whole ecosystem. “We expanded into Saudi last year and we we are still growing our team there. “And I think there are more exciting things to come as we get bigger and bigger in the country.” The company is facing competition in the kingdom from firms such as Spare, which said it received certification last month. But Sanad said he welcomed this as it would raise standards. Tarabut CFO Tariq Sanad says it is ‘in talks with pretty much everyone’ Testing and expansion With open banking still in its infancy across the GCC, Sanad said the region is moving from debating and designing regulations to implementing frameworks. At the end of 2022, there were 11 regulatory sandboxes for fintech companies in operation, compared with four in 2019. These offer a place for firms to test innovations with real consumers. The Central Bank of the UAE is working on regulation for open banking, while Dubai International Financial Centre and Abu Dhabi Global Markets have licensed fintech companies since April 2022. The Central Bank of Saudi Arabia launched its open banking framework in November, followed by the release of its Account Information Services framework. Elsewhere, central banks in Egypt and Oman have taken steps by establishing sandboxes, while the Central Bank of Kuwait has issued regulatory guidelines to facilitate experimentation with new fintech ideas. Tech startups in Dubai have raised $2bn, a sign of the Gulf’s eagerness for digital innovation Sanad predicts that adoption of open banking in the GCC will be higher than in the West. “We might have a smaller population to play with but I think the market is much more hungry for these types of services,” he said. “Typically, if you ask any expat, one of the one of the key challenges of moving to the region is banking. “Now open banking is disrupting it which should facilitate the improvement of the sector. “Government initiatives aimed at promoting a digital economy in the GCC further strengthen the case for higher open banking adoption rates.” Open Banking Limited is the implementation organisation working with the UK’s largest banks to introduce open banking in the UK. It says adoption by businesses in the UK is higher than among consumers, at 16 percent versus 11 percent. The UK was one of the early adopters of open banking. Last year it had 68.2 million payments using the system, up from 25.2 million in 2021. Bahrain is another early adopter of open banking, and has been at the forefront of the movement in the Gulf. Tarabut started in the country in late 2019. It is now partnering with eight out of the nine local banks operating in the kingdom. Hiring spree Following its Series A fundraising, Tarabut has been on a recruitment drive that includes the appointment Chun Ong and Nino Ocampo. Ong previously worked at Molo, a digitally native mortgage lender in the UK, and Ocampo is the former global open banking head at HSBC. “Success in startups is heavily reliant on the people that you work with,” Sanad said. “The team here is quite impressive and this gives us the ammunition we require to beat the competition.” Sanad joined from Pure Harvest Smart Farms, where he served as CFO. The technology-enabled agriculture business is one of the highest-funded startups in the region, with $387 million. That experience is likely to bode well for Tarabut. Further fundraising is expected over the next two years. “Our current fundraise enables us to really solidify our position in Saudi,” Sanad said. “There will be other funding rounds in the future as we start to think about expanding into the UAE and any other countries that come on board. “As soon as the regulations are in place in other countries, we are ready to go.” Tarabut open banking services TG Connect enables consumers to securely connect their bank accounts and consent to sharing their transaction data for better experiences and services. TG Income Verification summarises consumers’ salary transactions, providing lenders with accurate and up-to-date income information. TG Categorisation transforms raw data to help consumers and financial institutions identify and understand transaction details, enabling better financial management and budgeting. TG Pay offers transfers between accounts, eliminating the need for traditional payment methods.