Open banking is a rich opportunity for GCC incumbent banks

Learned a lot lending an editorial hand here:

Finance Middle East, July 28, 2024

by Dr. Antoine Khadige, Nader Haddad, and Marwan Nadda



Banking in the GCC region is undergoing a significant transformation with the growing impact of regulatory-led open banking initiatives. The Central Bank of Bahrain is preparing to enter the second phase of its open banking plan. Saudi Arabia has announced the gradual implementation of open banking use cases. Kuwait is testing open banking products, and the Central Bank of the UAE has initiated an open finance initiative covering banks and insurers.

With open banking regulatory directives, which require the sharing of customer data (with the customer’s consent) with trusted third parties, incumbent banks are entering a new era of competition. New banking entrants such as fintechs and payment providers can access incumbents’ now-exclusive customer relationships and entice customers away with new products and services.

If they articulate the right vision, however, incumbent banks can meet this challenge head-on, adopt the regulatory dictates of open banking and go beyond them. Banks that embrace open banking—which will grow at a global annual rate of 25% to 27%, according to MarkNtel Advisors and Grand View Research—can retain their market share and transform themselves, create new revenue streams, and forge deeper customer relationships. In Saudi Arabia, for example, we project an open banking penetration rate of 20% with retail customers by 2030.

Incumbent banks can take three actions to take advantage of open banking and position themselves in its vanguard. Read the rest here.