Open banking ‘set to alter financial sector’

MANAMA: Streamlined lending, automated accounting, and new payment methods are set to transform Bahrain’s financial sector in the wake of widespread open banking adoption, according to an expert.

Describing open banking as “a big step for banks, regulators, and third-party providers”, India-based software major Tata Consultancy Services (TCS) vice-president and regional head for Middle East, Africa, and Mediterranean Sumanta Roy told the GDN in an exclusive interview that the trend would develop the local ecosystem to encourage innovation in banking.

The Central Bank of Bahrain (CBB) announced on Tuesday that all retail banks in the country have implemented the necessary infrastructure for compliance with the Bahrain Open Banking Framework (OBF).

The framework was made public last October, making Bahrain the first country in the world to issue open banking guidelines that include Islamic finance.

It sets the terms for the sharing of financial information electronically, securely, and only under conditions that customers agree to.

Mr Roy lauded the CBB in getting the implementation going, saying “the concept of open banking was more of an opportunity earlier and with the pandemic, this has become a need.”

Going forward, he expects to see “more new innovations and ideas around open banking to touch everyone’s lives and make this a huge success in the kingdom.”

The expert asserts that the ultimate beneficiaries of the technology will be consumers, as they will have more options for managing their money, borrowings, and payments.

Allaying fears about data loss, identity theft and data protection, Mr Roy said banks and financial institutions are already governed well in Bahrain with strong security policies which encompass privacy, security and data sharing rules.

In 2018, Bahrain enacted a law on the protection of personal data setting the terms and conditions under which businesses process personal data in the kingdom.

The IT service provider is excited about new opportunities opening up as open banking demands a high-quality infrastructure to ensure all the parties consume and provide the services seamlessly.

The expert explained that Bahrain is one for the key cloud infrastructure providers for the region now with the Amazon Web Services cloud and this has created options for the industry apart from the regular investments.

TCS has been actively engaged with Bahrain customers for almost 20 years and started local operations in 2005 when it established an office.

The firm currently works with more than 10 companies in the country, ranging from banking, financial services and insurance to telecom, government, energy and insurance sectors – as it offers cloud services, system integration, product implementations and consulting.

Realising the major role of localisation in sustaining and growing operations, TCS has started investing more on local resources and talent pools, said Mr Roy.

A combination of attractive policies and infrastructure enabled the government to attract many international financial institutions to invest in Bahrain, which is set to continue, he added.

 

Source: https://www.gdnonline.com/Details/945410/Open-banking-%E2%80%98set-to-alter-financial-sector%E2%80%99

 

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