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Tarabut poised as Saudi plans open banking regulations

Open banking allows for the sharing of data between banks and other institutions Pexels/Tima Miroshnichenko
Open banking allows for the sharing of data between banks and other institutions
  • Open banking allows sharing of financial data
  • Saudi framework launching by end of 2023
  • Tarabut already has Saudi certification

Open banking platform Tarabut Gateway is gearing up for the launch of new regulations in Saudi Arabia as the kingdom expands its financial technology offerings.

The system of open banking allows for financial data to be shared between banks and third-party service providers through the use of applications.

Ayman al Sayari, governor of the Saudi Central Bank, known as Sama, said the Open Banking Payment Origination Services Framework – part of rules to develop the sector – is slated to be issued by the end of 2023.

Dubai-based Tarabut is expanding its team and partnerships in Saudi Arabia, where the company was one of the first to receive certification from Sama.

Tarabut has so far partnered with leading lenders such as Saudi National Bank and Riyad Bank, and further discussions are ongoing. 

Tarabut Gateway CFO Tariq Sanad hailed the latest announcement, saying it reinforces Saudi Arabia’s “consistent and successful drive” towards open banking. 

“Tarabut Gateway eagerly anticipates fostering deeper collaborations with fintech innovators, echoing Sama’s transformative mission for the financial sector,” he added.

A developing sector

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.

Bahrain has been at the forefront of the Gulf’s open banking movement. It has an ambitious plan to expand to open finance, integrating other financial services such as insurance and investments.

Sama launched its open banking framework in November, followed by the release of its Account Information Services earlier this year.

Al-Sayari’s announcement is part of an evolving financial technology story in the kingdom where authorities aim to reduce dependence on cash and increase the number of fintech companies to 525 by 2030, when the sector could contribute SAR13.3 billion to national GDP.

As of the end of June, there were 183 fintech companies operating in Saudi Arabia.

Sanad told AGBI last month that “there are more exciting things to come” in Saudi Arabia, but Tarabut is facing competition in the kingdom from companies such as Spare, which said it received certification in July. 

Open banking is still in its infancy across the GCC. 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.

Elsewhere, central banks in Egypt and Oman have taken steps by establishing “sandboxes” to test new concepts, while the Central Bank of Kuwait has issued regulatory guidelines to facilitate experimentation with new fintech ideas. 

Tarabut started in Bahrain in late 2019 and is now partnering with eight out of the nine local banks operating in the kingdom.