Bahrain launches open banking framework

MANAMA: Bahrain has overtaken economic giants to launch the world’s first open banking guidelines that include Islamic finance.

The Bahrain Open Banking Framework (OBF), launched yesterday by the Central Bank of Bahrain (CBB) during a virtual event, sets the stage for the practice of sharing financial information electronically, securely, and only under conditions that customers agree to.

It opens the way to new products and services that could help customers and businesses get a better deal.

This framework includes guidelines on operations, security standards, customer experience, technical open Application Programming Interface (API) specifications and the overall governance needed to protect customer data.

These standards follow comprehensive rules on open banking which were issued in December 2018.

The framework was developed in collaboration with Deloitte and in consultation with retail banks and other financial institutions in the kingdom.

Speaking during the launch, CBB Governor Rasheed Al Maraj said, “This is a continuation of efforts in developing the local ecosystem to encourage innovation in banking, while providing customers with advanced services that keep pace with global banking developments. It will also assist emerging fintechs to work competitively and is in line with the CBB’s vision of digital transformation, innovation and attracting fintechs.”

The kingdom’s banking and finance regulator explained that open banking enables two broad categories of services.

 

 

The first is ‘account information’, which gives customers access to information on all their bank accounts through a single platform, while the second is ‘payment initiation’ which allows licensed third parties to make payments on behalf of customers while allowing seamless transfers between different customer accounts through a mobile-based application.

The framework has been developed to promote innovation while ensuring the highest standards in customer data confidentiality, data security and privacy, for the safety and robustness of Bahrain’s financial system.

Also present in the session was Yousef Al Fadhel, executive director for corporate services at the CBB and chairman of Bahrain OBF Committee, who said, “The framework has been customised for Bahrain, based on other jurisdictions’ experiences and in line with the strategic vision of the CBB, with the ultimate objective of facilitating better services at lower costs with better choices for banking customers. We are confident that this initiative will stimulate innovation further, which will in turn reinforce the kingdom’s position as a pioneer and innovator in financial services.”

The customer can choose when, for what purpose and for how long, to give access to their data and only third party providers regulated by the CBB can provide open banking services in the country.

The four guiding principles that the framework is based on, said Deloitte lead engagement partner Monish Shah, are: Delivering true value without placing undue burden on any participant; Ensuring customers are fully informed of their rights and responsibilities regarding the transfer, possession, and use of their data; Keeping customer convenience, safety and security at the centre and Ensuring a seamless economy wide adoption by balancing regulation, participation, and speed to market with the scope of products and data.

The Bahrain OBF is the first in the world to include Islamic banking licensees, added Mr Shah.

The framework will continue to be revised and updated periodically, based on inputs from the industry, and changing global trends.

The launch event also featured a presentation by open banking expert Richard Williams, who shared use cases from the UK, which was the first in the world to set open banking rules in 2016 and has seen the number of users of the service grow to 2 million as of last month.

 

Source: http://www.gdnonline.com/Details/886064

 

Share this page Share on FacebookShare on TwitterShare on Linkedin
Close

Discover the 'Made in France à Bahrain' Guide

'Made in France à Bahrain' - Edition 2021
is YOUR guide to the economic presence in Bahrain. Click here to view the online guide