CBB issues final rules on open banking

MANAMA: The Central Bank of Bahrain (CBB) has issued final rules on open banking, which will facilitate the provision of a variety of innovative services for bank customers in the kingdom.

Khalid Hamad, executive director of banking supervision at the CBB, said: “The open banking initiative will have a significant positive impact on the quality of services offered to consumers in the kingdom and will give the country’s financial sector a competitive edge in the Middle East.”

Open banking services entail the provision of two broad categories of services.

The first is ‘account information service’ which provides customers with access to all bank account information in an aggregated manner through a single platform, whereas the second category is ‘payment initiation service’ which allows licensed third parties to initiate payments on behalf of customers while allowing seamless transfers between different customer accounts through a mobile-based application.

According to Investopedia, open banking is a system that provides a user with a network of financial institutions’ data through the use of application programming interfaces (APIs).

The open banking standard defines how financial data should be created, shared and accessed.

By relying on networks instead of centralisation, open banking helps financial services customers to securely share their financial data with other financial institutions.

Benefits include more easily transferring funds and comparing product offerings to create a banking experience that best meets each user’s needs in the most cost-effective way.

Open banking is also known as “open bank data.”

Source: http://www.gdnonline.com/Details/444657