PHOTO
A car passes in front of the Central Bank of Bahrain in Manama, October 27, 2013. Hamad I Mohammed
MANAMA: It’s all systems go for implementation of open banking in the country, the Central Bank of Bahrain (CBB) announced yesterday.
This means that all retail banks in the country have implemented the necessary infrastructure for compliance with the Bahrain Open Banking Framework (OBF) announced last October.
The regulator said yesterday that the grace period for compliance with the OBF ended on April 30 this year, six months after Bahrain became the first country in the world to issue open banking guidelines that include Islamic finance.
CBB’s executive director of corporate services Yousef Al Fadhel said it has been cooperating with retail banks during the past period to take practical steps towards implementing the new standards.
This, he said, was part of a wider strategy that supports banking innovation leading to better solutions for customers.
The OBF sets the terms for the sharing of 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.
Some of the benefits from a consumer perspective are: Aggregation or ‘global’ viewing of account or financial position data from different retail banks; Proactive financial management and budgeting tools; Easier product comparisons; New channels for Internet payments without the use of credit cards/debit cards and Speeding up of loan approvals as lenders get easier access to applicants’ data.
The 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 issued in December 2018, in alignment with the European Payment Services Directive (PSD-2).
They have been developed to keep pace with recent developments targeting not only the retail consumer, but also small and medium enterprises and the corporate sector.
This initiative is part of a larger upgrade of the Bahraini financial sector aimed at fostering competition and enhancing efficiency amidst rising demand for connectivity and changing consumer trends.
Mr Al Fadhel said the newly-developed implementation guidelines and standards will help the Bahraini banking sector achieve the highest standards in terms of customer friendly digital offerings, making the sector comparable with those of other major financial centres of the world.
He added: “The open banking initiative is an integral part of the wider ecosystem in which the kingdom’s financial services sector will develop a broad range of innovative services.”
The CBB will continue to play its role in making the national financial services ecosystem optimal for use of innovative technology and emerging business models, said the official.
avinash@gdn.com.bh
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